Preamble

The House met at a Quarter before Three of the Clock, Mr. SPEAKER in the Chair.

PRIVATE BUSINESS.

Falmouth Docks Bill [Lords],

As amended, considered; Amendments made; Bill to be read the third time.

Oral Answers to Questions — INDIA.

KARACHI TROOPS TRAIN INCIDENT.

General Sir IVOR PHILIPPS: 1.
asked the Secretary of State for India, in connection with the Karachi troop-train incident, whether, in view of the fact that it was unusual to send British troops to India in the hot season, any special suggestion or instructions had been sent by the India Office to the Government of India to safeguard the movement of such troops, both as regards the port of disembarkation and the journey inland by rail; and whether such suggestions or instructions were complied with or varied in any way with regard to the troops on board the "Ballarat"?

Lieut.-Colonel W. GUINNESS: 12.
asked the Secretary of State for India, in connection with the Karachi troop-train incident, whether, in view of the fact that it was unusual to send British troops to India in hot weather, any special suggestions or instructions had been sent by the India Office to the Government of India to safeguard the movement of such troops, both as regards the port of disembarkation and the journey up country by rail; and whether such suggestions or instructions were complied with or varied in any way by the Government of India with regard to the troops on board the "Ballarat"?

The SECRETARY of STATE for INDIA (Mr. Montagu): I understand that no special instructions were sent to the Govern-
ment of India by the India Office regarding the drafts on the "Ballarat," The entire shipping arrangements were made by the War Office, and the India Office had nothing to do with them and were not informed of them.

ARMY OFFICERS (PAY, ETC.).

Colonel YATE: 3.
asked the Secretary of State for India whether, considering that the new rates of pay, half-pay, and retired pay for officers of the British Army have been approved, he can now state when the new rates of pay, pension, leave, and expatriation allowances will be approved for the officers of the Indian Army?

Mr. MONTAGU: I have asked the Government of India to consider urgently the question of Indian Army pay, and I have suggested as an interim measure the grant of temporary allowances when the War Office have published and applied the new rates of British Army pay. Consideration on similar lines will be given to the leave and pension rates when these are finally settled for the British Army.

PUNJAUB AND DELHI.

Lieut.-Commander KENWORTHY: 4.
asked the Secretary of State for India whether any persons in the Punjaub and Delhi were flogged or otherwise beaten in the streets either by sentence of an extraordinary tribunal or under general orders issued by the military authorities for petty breaches of their regulations, such as the non-opening of shops or being in the streets during prohibited hours, though not concerned in any act of violence?

MR. MONTAGU: There were no prosecutions before or punishments by tribunals for refusal to open shop. No case of public flogging for petty breaches of orders has been brought to my notice.

OFFICERS ON LEAVE (MEDICAL ADVICE).

Colonel YATE: 10.
asked the Secretary of State for India whether he is aware of the expenses involved in obtaining medical advice in London for officers on leave from India; and whether ho can do anything to assist these officers in that respect?

Mr. MONTAGU: All Indian Army officers on sick leave in this country during the War have been admitted to the same medical treatment in hospitals or by private practitioners as British Service officers. Through the generous aid of the London School of Tropical Medicine it has
also been possible to arrange to send civil and military officers suffering from tropical diseases to the school hospital at the Albert Docks; for diagnosis and preliminary treatment. I hope it may be possible to continue this arrangement. It secures to the officer the best advice on his case and as to its treatment. The hospital charges in these cases are borne by the revenues of India.

GOVERNMENT OF INDIA BILL.

Colonel YATE: 11.
asked the Secretary of State for India whether, considering that Sir James Meston has been deputed by the Viceroy to explain the views of the Government of India to the Joint Select Committee on the Government of India Bill in favour of the proposed scheme for diarchy, it is the intention of the Viceroy to depute representatives of the provincial Governors to explain their views in favour of the alternative scheme propounded by those Governors in their minute of the l5th January, 1919; and, in the event of the Government of India not giving effect to their undertaking to give all facilities possible to accredited representatives of all shades of opinion to visit this country to give evidence before the Committee, he will state what steps he proposes to take to carry out his own undertaking that care would be taken that the views of the Governors of the provinces in India are represented before the Committee?

Mr. MONTAGU: I have already told my hon. and gallant Friend that it rests wholly with the Select Committee to decide what evidence they require, but that I shall be happy to submit for their consideration the names of any witnesses suggested to me by my hon. and gallant Friend. Heads of provinces have committed their views to writing, and will be represented on the Committee by their constitutional Parliamentary spokesman, the Secretary of State.

Colonel YATE: Does that mean that the Government of India have deliberately refused to permit the Governors of provinces in India to make their representations before the Select Committee?

Mr. MONTAGU: It means nothing of the kind, and I am not aware that any suggestion of the kind has been made to the Government of India.

Captain ORMSBY-GORE: Is it not a fact that Sir Michael O'Dwyer, who is one of the five heads of provinces referred
to by my hon. and gallant Friend who signed the Report of the five dissentient provinces, is now in this county and is available to give evidence?

Mr. MONTAGU: There are several ex-heads of provinces in this country at the present moment—Sir Michael O'Dwyer, Lord Pentland, Lord Carmichael, Sir Archdale Earle, and many others—but 1 think my hon. and gallant Friend is referring to men who are now heads of provinces.

Colonel YATE: May I ask if theèlate Lieut.-Governor of the United Provinces will be allowed to give evidence?

Mr. MONTAGU: I have no knowledge that he has ever suggested that or that the Select Committee would wish him to. His views are on record, and he signed the same scheme which has been presented by the Lieut.-Governors.

Colonel YATE: Does that mean that Sir Michael O'Dwyer will be the only one representative of the scheme presented by the provincial Governors?

Mr. MONTAGU: As I have said, if my hon. and gallant Friend wishes to suggest anybody else, I will charge myself to bring it before my colleagues on the Committee on his behalf.

Colonel YATE: I have to thank the right hon. Gentleman. It is not I who wish to give evidence, but the Governors of the provinces in India. There are eight provinces, and will a representative of each be allowed to give evidence?

Mr. MONTAGU: I can hardly believe that the Lieut.-Governor of the United Provinces will have communicated his wishes to my hon. and gallant Friend in preference to the Government of India or myself, and I have had no suggestion to that effect.

Colonel YATE: I have had no suggestion to that effect either, but Sir John Hewett is now in this country, and I ask—

Mr. SPEAKER: Order, order!

HOME ADMINISTRATION (LORD CREWE'S COMMITTEE).

Mr. MOSLEY: 13.
asked the Secretary of State for India when the opinions of the Government of India in the Report of Lord Crewe's Committee on the Home Administration of Indian Affairs will be published?

Mr. MONTAGU: I cannot say at present, but their views will be available to the Select Committee.

Oral Answers to Questions — RUSSIA.

GOVERNMENT OF KHIVA.

Sir J. D. REES: 2.
asked the Secretary of State for India whether he has any authentic information regarding an alliance said to have been concluded between the Soviet Government of Russia and the Government of Khiva; and whether he can say what Government is in power in Khiva at the present time?

The UNDER-SECRETARY of STATE for FOREIGN AFFAIRS (Mr. Cecil Harmsworth): I have been asked to reply. His Majesty's Government have no knowledge of any such alliance as indicated by the hon. Member.
As the hon. Member is doubtless aware, Khiva was a part of the former Russian Empire. It is understood that the capital was in the hands of the local Khan, who was in active hostilities against the Bolsheviks as late as the middle of last February, since when no definite news has been received as to the form of Government at that place.

EASTERN BALTIC (SOVIET WARSHIPS).

Lieut.-Commander KENWORTHY: 21.
asked the First Lord of the Admiralty if he is aware of the increase in efficiency of the Russian Soviet warships in the Eastern Baltic during the last few months; if he is aware that, among other modern vessels, these include two ships of the line and several modern destroyers; that the shooting of these ships is as accurate as was the shooting of the German men-of-war; whether he will state the object of keeping British ships of war in these waters; and will he state whether he is satisfied that our forces there are sufficient and in no danger of being overwhelmed by a sudden attack?

The FIRST LORD of the ADMIRALTY (Mr. Long): The answer to the first and second parts of the question is in the affirmative, and to the third part in the negative. The object of keeping British ships in the Baltic is to prevent unprovoked raids on the coastal towns of the Baltic States and Finland, to prevent interference with the arrangements to feed the needy populations of these border
States, and to prevent the spreading of Bolshevik militarism. The answer to the last portion of the question is in the affirmative.

Captain REDMOND: May I ask how the right hon. Gentleman defines Bolshevik militarism?

BRITISH NAVAL FORCES.

Mr. SWAN: 23.
asked the First Lord of the Admiralty whether British Naval forces are operating in the Caspian or on the rivers which drain into the Caspian or on the shores of the Caspian; who is the officer in command of these operations; at what date was the Caspian recognised as a special sphere of operations; what forces are opposed to our forces in the Caspian area; and whether any decision has been taken, or statement can be made, as to the conclusion of these operations?

Mr. LONG: British Naval Forces are operating in the Caspian Sea. The officer in command is Commodore David T. Norris, C.B. These operations have been going on since August, 1918. The opposing force is a Bolshevik fleet consisting of a large number of armed merchant ships, destroyers, and submarines. The numbers are not accurately known. The operations in this area will be concluded, and our personnel will be withdrawn, before winter.

Mr. ROBERT RICHARDSON: 26.
asked who is in command of the British Naval Forces in the Black Sea; what powers besides Great Britain have at present naval units in the Black Sea; whether there is a commander-in-chief of the Allied naval forces in the Black Sea; and, if so, who that officer is?

Mr. LONG: Rear-Admiral Michael Culme Seymour, C.B., M.V.O., is in command of the British Naval Forces in the Black Sea and Marmora, under the orders of the British Commander-in-Chief, Mediterranean. In the Black Sea are French and Italian Naval units. There is no Allied Commander-in-Chief.

NORTHERN FORCES (COMMANDER).

Mr. SWAN: 61.
asked the Secretary of State for War who is the Russian officer in command of the Russian Northern forces with which this country is co-operating; when did he receive his present command over those Russian forces; whether there is a recognised commander-
in-chief of all the Allied and Russian forces co-operating in the Northern, Archangel, and Murmansk areas against the Soviet Government's forces; if so, who is that officer; whether the Finnish and other forces acting against Petrograd are under one commander; and, if so, who is that officer?

The FINANCIAL SECRETARY to the WAR OFFICE(Mr. Forster): The Russian officer who has been in command of all the forces of the North Russian Provisional Government since January, 1919, is General Miller. The Allied forces in North Russia (including those Russian forces under General Miller) are divided into two commands—Archangel, which is under Major-General Ironside, and Murmansk, which is under Major-General Maynard. The Russian North-West Army operating on the south side of the Gulf of Finland is under the command of General Rodzianko.

Mr. SWAN: Is this not a violation of the promise to withdraw the troops?

Mr. FORSTER: I do not think any of the terms have been violated.

BRITISH AND ALLIED TROOPS.

Captain BENN: 65.
asked the total number of British and Allied troops, respectively, at present in Russia?

Mr FORSTER: It is very undesirable at the present moment, when the whole question of the Allied policy in Russia is a matter of urgent consideration, to give this information. As has been publicly announced, all British forces except volunteers are either in process of withdrawal or will be evacuated within the next two or three months, according as shipping is available.

Captain BENN: Does that apply to all the theatres of War in Russia?

Mr. FORSTER: I am afraid I cannot answer that without notice.

CASUALTIES.

Captain BENN: 66.
asked the total number of British casualties in the Russian theatres of war since November, 1918?

Mr. FORSTER: The numbers are:

Killed.
Wounded.
Missing.
Total


Officers
19
20
2
41


Other Ranks
148
185
37
370






411

Captain BENN: Can the right hon. Gentleman give us any information concerning the Bolshevik excesses which have been reported recently in the Press?

Mr. SPEAKER: That does not arise out of the question.

COST OF BRITISH EXPEDITIONS.

Captain BENN: 67.
asked what sum is taken in the present year's Estimates towards the cost of the British Expeditions in Russia?

Mr. FORSTER: The troops in Russia were included with the Home and Colonial Establishments, as shown in Army Vote A passed by the House in February last, and the provision made was based on the estimated total strength without reference to the area in which the troops might be employed. I regret, therefore, that I am unable to separate the provision in Estimates for troops in Russia from that for troops in this country.

Sir D. MACLEAN: Is the right hon. Gentleman aware that the Secretary of State for War, on the Adjournment Motion, promised me that if a question was addressed to his Department that he would be able to give an estimate as to the cost to this country of the troops in Russia?

Mr. FORSTER: I am not aware that there was anything in the nature of a binding promise. My right hon. Friend said if it was possible to give the information it would be made available.

Captain BENN: 68.
asked the total sum spent since the Armistice on the wars in Russia, distinguishing, if possble, the cost of shipping freights and munitions from the cost of maintenance of personnel?

Mr. FORSTER: I would refer the hon. and gallant Member to my reply yesterday to the hon. and gallant Member for Central Hull.

Captain BENN: Does that mean that the Government cannot state how many men are in Russia or how much it is costing?

Mr. FORSTER: It means that I cannot state it without a very great deal of elaborate work, such as I am not prepared to undertake at the present moment. The hon. and gallant Member will remember that the form in which our accounts are kept is prescribed by Parliament, and the form in which these accounts are kept do
not enable me, without a great deal of research, to dig out the information for which he asks.

Captain BENN: Does the answer mean that the Government is not in possession of the information showing what the Russian adventure is costing this country?

Mr. FORSTER: I do not know what the hon. and gallant Member means by "in possession." Of course, all the details of the accounts are given, and calculations can be made as to what all these expeditions cost, but the means of ascertaining the precise amount are not readily available and will not be available until the full accounts are received.

Captain BENN: Will the right hon. Gentleman say what amount of tonnage which is needed for other purposes is being used in supplying munitions to Russia?

Mr. FORSTER: How is it possible that I can give that information without notice?

Captain BENN: The question is on the Paper.

Oral Answers to Questions — ROYAL NAVY.

NAVAL WRITERS (H.M.S. "EGMONT ").

Mr. HOHLER: 14.
asked the First Lord of the Admiralty if he will state how many naval writers, hostilities only, were employed on His Majesty's ship "Egmont'' at the date of the Armistice and how many have since been released; how many were employed on the Mediterranean station and how many have since been released; are any reliefs for these men on their way; and will he state what steps he proposes to take to deal with this question?

The PARLIAMENTARY SECRETARY to the AD MIR ALTY (Dr. Macnamara): On the date of the Armistice there were employed in His Majesty's ship "Egmont" five second writers and ten third writers for hostilities only. All have been sent home. On the institution of the dispersal roster, 143 writers were employed on the Mediterranean station; fifty-seven have since been released. A number of writers have been sent out recently, and others are on their way. Every effort is being made to relieve all demobilisable writers abroad: but, in view of the shortage of men of this rating, delay is inevitable before all can be released.

OFFICE'RS' STEWARDS AND SERVANTS.

Mr. HOHLER: 15.
asked the First Lord of the Admiralty whether he can now announce an improvement in the general conditions of service of officers' stewards and servants?

Dr. MACNAMARA: As a result of the Jerram Committee, the pay of all grades of officers' stewards and cooks was increased by over 100 per cent., and their pensions were increased in common with those of other ratings. Other alterations in conditions of service of this branch have been proposed, and the Report of a Committee which inquired into the subject is now under consideration.

Mr. HOHLER: Will my right hon. Friend expedite this matter, which has now been delayed for some six or eight months?

Dr. MACNAMARA: I do not think the Committee was at work six months ago. But I will represent my hon. and learned Friend's request to the Second Sea Lord.

COAL AND OIL FUEL CONSUMPTION.

Lieut.-Commander KENWORTHY: 20.
asked what is the present monthly consumption of coal for the Royal Navy; and what is the present monthly consumption of oil fuel?

Dr. MACNAMARA: Careful consideration has been given to the further question of my hon. and gallant Friend, and I have to inform him it is still considered undesirable to publish the figures relating to the Navy expenditure of coal and oil. He may rest assured, however, that consumption is limited to the bare necessities of operations and movements.

LEAVE (NORMAL).

Commander Viscount CURZON: 22.
asked when it is intended to reinstate the normal peace leave routine for the Navy?

Dr. MACNAMARA: Normal peace leave routine is now being reverted to, and is being supplemented this year by special demobilisation leave.

OFFICERS' UNIFORM.

Viscount CURZON: 24.
asked what changes, if any, are contemplated in the uniform of officers of the Royal Navy?

Dr. MACNAMARA: As I have already said, this matter has received close con-
sideration. A Fleet Order will immediately be issued, but I am afraid I am not in a position to anticipate it.

PAY (NEW SCALE).

Viscount CURZON: 25.
asked whether the new scale of pay for the Royal Navy will be subject to taxation at special or ordinary rates?

Dr. MACNAMARA: Income Tax on service emoluments will continue to be charged at service rates for the current financial year, but thereafter will be at the ordinary rates applicable to the rest of the community.

H.M.S. "DONOVAN" (LEAVE).

Major Sir B. FALLE: 27.
asked the First Lord of the Admiralty if he is aware that H.M.S. "Donovan" was recently in home waters from Gibraltar; that the men were given no home leave on the plea that this ship was urgently required, at Gibraltar; that on the ship's return to Gibraltar she was immediately docked to have her boilers cleaned, and that she is still in dockyard hands; if he can say if this was the urgency requiring her presence at Gibraltar; if such boiler cleaning could have been as well and more economically performed in England and that her crew might then have had the advantage of home leave; if he will say if the engineer officer of the ship asked to be allowed to clean boilers in England; if the length of the passage from Gibraltar to England and from England to Gibraltar can be given as proof of the condition of the boilers; and if he will consider the possibility of some members of the crew of H.M.S. "Donovan" being detailed to bring H.M.S. "Brisk" home instead of sending out a crew from home to take this ship back, seeing that H.M.S. "Donovan" has, among other ratings, two senior petty officers in excess of her complement?

Dr. MACNAMARA: As I told my hon. and gallant Friend on the 2nd July, H.M.S. "Donovan" arrived in home waters on the 29th June and left for Gibraltar on the 1st July to continue her duties from that port. The ship was not docked to have her boilers cleaned, this being neither customary nor necessary. The ship is not in dockyard hands, having sailed for Oran, Bizberta, and Malta on the 17th July. Boiler cleaning is carried out by the ship's company periodically and on the completion of voyage, and would
therefore have been carried out on return to Gibraltar as a matter of routine. As regards the last part of the question, we cannot undertake to detail members of the crew of the "Donovan" to bring the "Brisk" home; neither shall we send out a crew to bring that vessel home.

ROYAL DOCKYARDS (STOEEHOUSE ASSISTANTS).

Sir C. KINLOCH-COOKE: 28.
asked the First Lord of the Admiralty whether he is now in a position to make any statement with regard to the allocation of established posts to storehouse assistants in the Royal dockyards?

Dr. MACNAMARA: The yards are being instructed to make recommendations for filling the thirty-five established posts assigned to store-house assistants.

SERVICE PENSIONS.

Sir B. FALLE: 32.
asked the Secretary to the Admiralty if he can make any statement as to the service pensions of men invalided apart from any award in respect of disability?

Dr. MACNAMARA: Under present Regulations, only a man with fourteen years' service is entitled to a life pension on the service disability scale, in addition to any award from the Ministry of Pensions in respect of permanent disablement. The whole question of the service disability side of the award made to the men invalided is now being considered.

Sir B. FALLE: Is it on the new basis?

Dr. MACNAMARA: That is the point, whether the service disability side shall be reassessed to an amount proportionate to the new scale basis, but as to that I can give no undertaking at the moment.

Oral Answers to Questions — NAVAL AND MILITARY PENSIONS AND GRANTS.

TIME-EXPIRED MEN DETAINED.

Mr. HOHLER: 16.
asked the First Lord of the Admiralty whether Clause 51 of the revised scale of pensions deals with the cases of sailors and Marines who had completed time for pension before or during the War and who have been detained in the Service under the existing law, or as to Marines under 5th Geo. V., c. 16; and
if not, will he take steps to include them and treat them in the same manner as pensioners now serving or who have served during the War?

Dr. MACNAMARA: The answer to the first part of the question is in the affirmative. The second part does not, therefore, arise.

Mr. HOHLER: Arising out of that reply, will these men who were detained get the improved pensions? That is the point.

Dr. MACNAMARA: Yes, certainly. I said the answer to the first part of the question is in the affirmative.

Mr. HOHLER: Is he aware that some of these men—at any rate one of them, has been discharged, was detained, and has not got his full pension?

Dr. MACNAMARA: Let me have the particulars.

GEEENWICH AGE PENSIONERS.

Mr. HOHLER: 17.
asked the. First Lord of the Admiralty whether any Greenwich age pensioners on attaining the age of sixty-five in the years 1916, 1917, and 1918, received the increased Greenwich age pensions of 9d. without making any application for such increase; and, if so will he give the approximate number?

Dr. MACNAMARA: Prior to the decisions of the Government, notified in Command Paper 149, it was necessary in the case of the age pensions to make awards by selection from the eligible candidates, in consequence of the limited funds annually available. Men in receipt of age pensions who had been ten years on the pension rolls became eligible at the age of sixty-five for increased age pensions, and the increased age pensions were awarded to all such men upon their making application. It was, however, the practice to date such awards from the time of application, it being considered fair to assume that application would not be delayed in cases in which the pension was really needed. As previously explained, this made for a more extended distribution of the benefits, as the available funds were always fully expended, and these savings on awards of increased age pensions went to other men in need. As my hon. and learned Friend knows, every life pensioner in receipt of the
Greenwich Hospital Pension will now receive the increased age pension, on reaching the age of sixty-five, without application.

Mr. HOHLER: Will my right hon. Friend, who has given so much verbiage, answer my question? [HON. MEMBERS: "Order, order!"] I am quite in order. My question is a perfectly simple one, namely, whether any Greenwich age pensioners on attaining the age of sixty-five in the years 1916, 1917, and 1918, received the increased Greenwich age pensions of 9d. without making any application for such increase; and, if so, will he give the approximate number?

Dr. MACNAMARA: The short summary of all this is "No." My hon. and learned Friend takes great interest in this, but "No" is the answer.

Mr. HOHLER: Will my right hon. Friend adopt the admirable procedure of answering "Yes" or "No" in future?

Dr. MACNAMARA: My hon. and learned Friend would be the first to complain.

Lieut. - Commander KEN WORTHY: May I ask if the right hon. Gentleman will continue to give us such information as he can in answer to our questions in the interest of the public, and not content himself with a pure negative?

Dr. MACNAMARA: Subject to what my hon. and learned Friend says, Yes.

CIVIL SERVANTS.

Captain HACKING: 48.
asked the Prime Minister whether, in view of the statement contained in the Disabled Soldiers' Handbook, 1918, which publication is given officially to every disabled man on discharge, that a pension has nothing to do with any wages or salary that a soldier may earn after discharge, and in view of the consequent natural dissatisfaction felt by Civil servants when a deduction is made from their pay, he will issue orders that no exceptions shall be made to the general rule laid down for Civil servants, which states that no deduction shall be made from the civil pay or sick pay of Civil servants in respect of disability pensions granted in connection with the War?

Mr. BALDWIN (Joint Financial Secretary to the Treasury): The present Regulations are the result of careful considera-
tion, and I am unable to contemplate their amendment as proposed. The hon. and gallant Member will be aware, from the answers given by me to the hon. Member for the Kirkdale Division of Liverpool on the 17th instant, and to the hon. Member for Twickenham on the 18th February last, that it is only when a Civil servant goes on sick leave before or within one month of return to duty that his civil pay is reduced, and even then he receives, inclusive of his disability pension, a sum equal to full civil salary.

MARBJAGE GRATUITIES.

Major COHEN: 75.
asked the Secretary for War whether members of the Q. A. I. M. N. S. Reserve are granted a war gratuity on resigning to be married, whereas members of the T. F. N. S. are not entitled to a war gratuity on resigning for the same reason; and whether, if this is so, he proposes to remove the injustice?

Mr. FORSTER: There is no difference. If they can be spared they are allowed to go, and receive the gratuity.

MILITARY SERVICE (CIVIL LIABILITIES) COMMISSION.

Mr. MARRIOTT: 84.
asked the Secretary for War whether he is aware of the great hardship inflicted upon disabled men and others who are applicants for Grants from the Military Service (Civil Liabilities) Commission by reason of the great delay in granting or refusing their applications; whether he can accelerate the machinery for dealing with such claims; and, if not, whether he will retransfer this work to the King's Fund, by which the claims were promptly and satisfactorily dealt with?

The MINISTER of LABOUR (Sir R. Home): I have been asked to answer this question. I am aware that there has been some delay in dealing with eases transferred to the Civil Liabilities Department from the King's Fund; but, as I explained on the 25th June to the hon. and gallant Member for Willesden West, one general reason for this is the large number of uninvestigated or only partly investigated cases handed over to the Department en bloc in April last. I am arranging for an increase of staff to deal with these cases, and thus expedite their settlement. It would not be practicable to re-transfer.

GOVERNMENT WAR RISKS INSURANCE SCHEME.

Sir JOHN BUTCHER: 94.
asked the President of the Board of Trade whether he is aware that compensation under the Government war-risk scheme has been refused to Mr. T. E. Davies, lately an officer on the steamship "Dafila,'' who is temporarily incapacitated from employment at sea; whether Dr. Hawkes, of Wallasey, and Dr. Buchanan, of Liverpool, have certified that Mr. Davies's ill-health is due, in their opinion, to strain and exposure at sea arising from war conditions; and whether he will cause a further investigation to be made into this case with a view to Mr. Davies being granted duo compensation under the Government war-risk insurance scheme for the time ho is incapacitated from employment at sea?

The PRESIDENT of the BOARD of TRADE (Sir Auckland Geddes): This case has been brought to the notice of the Board of Trade, and it has been fully considered by the War Risks Association concerned. The medical opinions mentioned have been given due weight, but it is not possible to bring cases under the war-risks compensation scheme unless there is evidence of some definite war peril over and above the ordinary anxieties incident to employment at sea under war conditions. The only definite war peril to which Mr. Davies was subjected was the torpedoing of the "Dafila," but he is quite recovered from the injury he received at this time, and he has since made, voyages on three other vessels. I regret that this case cannot be regarded as covered by the war-risks scheme.

Sir J. BUTCHER: Will the right hon. Gentleman consider this case; it is a very hard one?

Sir A. GEDDES: I will certainly look into it very carefully.

Oral Answers to Questions — DEMOBILISATION.

HOSTILITY RATINGS AND TIME-EXPIRED MEN.

Lieut.-Commander KENWORTHY: 19.
asked the First Lord of the Admiralty the reason that hostility ratings and time-expired men of His Majesty's ship "Walker," now in the Baltic, have not been returned home for demobilisation; and whether ho is aware that when they
were ordered to the Baltic they were promised relief within six weeks' time and that this period has now been considerably exceeded and no reliefs have yet arrived?

Dr. MACNAMARA: Reliefs for all demobilisable men in His Majesty's ship "Walker" have already been sent to that vessel in the Baltic. Owing to the distance and movement of vessels, their arrival is uncertain. If, however, they have not already arrived, they should do so very shortly.

APPLICATIONS FOE RELEASE.

Mr. R. YOUNG: 63.
asked the Secretary of State for War whether he is aware that an application was made by the Sovereign Confectionery Company, Lowton, Lanes, on 28th December, 1918, for Private E. Leigh, No. 202367, G. and Q. Offices, 55th Division, W. O., British Expeditionary Force, France, as a pivotal man; that such application was stamped by the Leigh Employment Exchange 30th December, 1918, and reached the camp commandant On 4th January, 1919; and if ho will explain why he has not been released?

Mr. FORSTER: Private Leigh is not registered by the War Office cither as pivotal or for special release, and I am informed by my right lion. Friend the Minister of Labour that he is not so registered by his Department. The application referred to by the hon. Member was apparently a contract offer of employment such as to obtain his registration as a slip man, but this alone does not render him eligible for demobilisation. If, however, ho is eligible under the instructions recently issued, he will be demobilised accordingly.

Lieut.- Colonel Lord HENRY CAVENDISH-BENTINCK: 64.
asked the Secretary of State for War whether he will order the immediate demobilisation of Gunner T. Bartlett, No. 612310, Royal Artillery Depot, Ambala, India, who enlisted on 25th September, 1914, and has spent two summers in Mesopotamia, and, although ordered for demobilisation, has now been sent to India?

Mr. FORSTER: Gunner Bartlett was apparently sent home from Mesopotamia via India, and was retained in that country owing to the conditions that existed there. I have already stated that when demobilisation recommences in India
those men who arrived from Mesopotamia and are eligible for demobilisation will be amongst the first to be released. I regret I can take no special action in this case.

Mr. WATERSON: Could the right hon. Gentleman send this news to the troops in India who are being sent to Egypt for demobilisation, and so allay the unrest which is prevalent there, and thus save the vast amount of correspondence hon. Members are receiving?

Mr. FORSTER: I will bring that point to the notice of my right hon. Friend.

COMPASSIONATE CASES.

Mr. G. MURRAY: 71.
asked the Secretary for War whether, in view of his published statement that there are many hard eases, both compassionate and pivotal, which deserve attention and whereas nothing is being done to meet these compassionate cases, he will consider the desirability of extending the definition of compassionate cases so as to provide that immediate release should be granted in cases where there are two parents both aged or infirm and dependent on the son, and also in the cases of a widower father who, through age or infirmity, is unable to support himself?

Mr. HIRST: 80.
asked the Secretary for War when he intends to modify the Regulations whereby a man can obtain release on compassionate ground;, from the Army, in view of the fact that he has made no mention of this matter in his Memorandum recently regarding demobilisation; and whether he is aware of the discontent existing in the ranks to-day owing to the existing Regulations for release on compassionate grounds and the small number of men who have obtained demobilisation through those channels?

Mr. FORSTER: As I stated yesterday, the Memorandum published on the 17th instant greatly enlarges the scope of the demobilisation Regulations, and also renders eligible numbers of men not previously eligible for release. Under the circumstances, I regret that I cannot at present consent to any further modifications of the Regulations governing demobilisation. I would add that during May and June, 7,864 releases on compassionate grounds were authorised, in addition to over 26,000 in previous months.

RIPON DISCHARGE CENTRE.

Mr. R. RICHARDSON: 79.
asked the Secretary for War if he will take steps to stop the regrading of men marked for discharge as medically unfit by their various units at the Ripon discharge centre where many of them are sent; if he will also take steps to stop the system employed at this centre of having men so regarded being paraded in front of representative officers of the Royal Engineers, Royal Army Service Corps, and Royal Army Medical Corps for the purpose of being picked out for one of these regiments; and if he is aware of the discontent existing amongst them through this action and the resentment felt at their treatment whilst undergoing the examination for transfer by the officers?

The SECRETARY of STATE for WAR (Mr. Churchill): I am making inquiries, and will let the hon. Member know the result as soon as possible.

MESOPOTAMIA EXPEDITIONARY FOECE.

Mr. MARRIOTT: 85.
asked the Secretary of State for War whether men who enlisted in 1914 are still being compulsorily detained in Mesopotamia; and, if so, when will they be released?

Mr. CHURCHILL: As already announced, these men will embark for home before the 28th July, subject to the necessary shipping being available.

Oral Answers to Questions — DAMAGE BY AIRSHIP LORRY.

Lord H. CAVENDISH-BENTINCK: 30.
asked the Secretary to the Admiralty on what grounds Mr. Colston H. Palmer, of 283, Arkwright Street, Nottingham, has been refused compensation for the damage done to his shop and the loss to his business on 1st June, 1916, when a Royal Naval airship lorry ran through his shop-front?

Dr. MACNAMARA: This case was very carefully considered in June, 1916, when the claim was originally received. From the circumstances of the accident, we were advised that no legal liability attached to the driver of the naval vehicle. The accident appears to have been due to the avoiding of a passenger on a tramcar who jumped off the tramcar, whilst it was in motion, directly in front of the naval car.

Oral Answers to Questions — UNEMPLOYMENT.

ROAD REPAIRS, DEVONSHIRE.

Mr. LAMBERT: 33.
asked the Minister of Labour if he is aware that, while the roads in Devonshire are badly needing repair and labour is needed for executing those repairs, the Labour Exchange at Exeter is advertising applicants as available for immediate employment and when the Crediton Rural District Council applied for men to take up road repairing the Exeter Labour Exchange replied that they had no men who wished to take up this work; and whether his Department will take steps to bring the workers and would-be employers together for road repairs?

Sir R. HORNE: I find on inquiry that the Crediton Rural District Council have not applied to the Exeter Employment Exchange for ordinary labour for road repairing, but are in search of persons who will take up contracts with the council for the repair and maintenance of roads over a stated period. Such persons are not commonly found among the workpeople on the registers of the Exchanges. The manager at Exeter has done, and will do, his best to help the council; but he cannot in the circumstances be blamed for the lack of success that has hitherto attended his efforts.

DISCHARGED AND DEMOBILISED SAILORS AND SOLDIERS.

Sir F. LOWE: 34.
asked the Minister of Labour whether he can state precisely what action is being taken to find civil employment for the 400,000 discharged and demobilised sailors and soldiers still unprovided for?

Sir R. HORNE: This question is not one which can be dealt with by way of question and answer. I have already informed the hon. Member that every effort is being made to deal with the situation, and I shall be happy to explain to him in detail the actual steps which are being taken, if he would care to make an appointment.

Sir F. LOWE: Does the right hon. Gentleman not think it would be very interesting to the general public, as well as to me personally?

Sir R. HORNE: I quite realise that. The information has been given in this
House from time to time, and I do not wish to take up the time of the House by giving detailed information.

An HON. MEMBER: Could the right hon. Gentleman say whether the actual number of demobilised sailors and soldiers still unemployed is 400,000?

Sir R. HORNE: That is a round number which is somewhat extravagant. In point of fact, the number of sailors and soldiers who will be reincorporated into employment is very large, and will be something between 80 and 90 per cent. of the whole number.

Oral Answers to Questions — DOLL MAKING, MANCHESTER.

Mr. HAILWOOD: 35.
asked the Minister of Labour what authority he has for employing 100 girls at the City Exhibition Hall, Deansgate, Manchester, making dolls and other toys; and what these dolls are costing the country, if due allowance be made for rent, rates, lighting, wages, etc.?

Sir R. HORNE: Eighty young women are receiving instruction in toy making, an industry which affords considerable possibilties in the way of subsequent employment. The work at the City Hall has only just commenced, but it will be possible to state the exact cost after the expiry of a few months.

Mr. HAILWOOD: Can the right hon. Gentleman state when he will vacate these premises, seeing that the hall is required for an important trade exhibition?

Sir R. HORNE: I have not been informed that the hall is immediately required, but if I have a complaint on that, I propose to take the complaint into consideration.

Oral Answers to Questions — WORKS CLOSED, GLOUCESTERSHIRE.

Mr. WIGNALL: 36.
asked the Minister for Labour if he is aware that at Micheldean, Gloucestershire, three works have been closed down since the signing of the Armistice; the cement works, which formerly employed 200 persons, the brick works, which employed 150 persons, and the Wickpool iron mine, which employed about 100 persons; and whether, in view of the importance of the pro-
duction of building material, he will consider the possibility of the Government taking over the brick and cement works, and also continuing the development of the iron-ore mines, and thus provide employment for the returned soldiers who are at present in receipt of unemployment benefit?

The DEPUTY-MINISTER of MUNITIONS (Mr. Kellaway): I have been asked to answer this question. I am making inquiries into the cases mentioned by my hon. Friend, and will communicate with him on the subject as soon as possible.

Oral Answers to Questions — JEWISH COLONISATION ASSOCIATION.

Mr. CLYNES: 39.
asked the Secretary of State for Foreign Affairs whether he is aware that on 16th June a number of soldiers belonging to a division of the Polish Uhlans, who marched into Kolomea, East Galicia, trespassed upon the farm estate at Slobodka Lesna, of the Jewish Colonisation Association, which is an English company with a registered office at 16, Old Broad Street, and shot dead three young Jewish students of the agricultural school who were training as farmers for Palestine; whether he will instruct His Majesty's representative in Warsaw to make an immediate and thorough investigation of this incident; and whether, in case the report is found to be true, he will demand that the soldiers guilty of the outrage shall be punished and the families of the victims shall be compensated?

Mr. HARMSWORTH: I have no official information with regard to the trespass alleged in the first part of the question, but I have telegrahped to His Majesty's representative at Warsaw for a report. Pending the receipt of this, report I cannot say what further action will be necessary.

Oral Answers to Questions — HUNGARIAN ARMISTICE.

Sir DONALD MACLEAN: 40.
asked the Secretary of State for Foreign Affairs whether the terms of the Hungarian Armistice have been published in full, as was the case with Germany and Austria; and, if not, will he take steps to do so, in view of the position in that country?

Mr. HARMSWORTH: The reply is in the affirmative. The Armistice with Austria-Hungary was signed on3rd November, and a special military convention applicable to Hungary was signed at Belgrade on 13th November. For further particulars I would refer my right lion. Friend to Command Paper 53 of this year.

Mr. J. JOHNSTONE: Is it the case that the Hungarian Government has three or four times the number of men in arms than they are entitled to under the Armistice?

Mr. HARMSWORTH: That does not arise, but this question is under the immediate consideration of the Peace Delegation in Paris.

Oral Answers to Questions — P. AND O. LINER "NANKIN."

Captain QRMSBY-GORE: 42.
asked the Under-Secretary of State for Foreign Affairs whether the Peninsular and Oriental liner "Nankin," en route for India, has been delayed at Port Said for cleansing purposes, and the passengers taken off the ship and placed in quarantine at Alexandria under very unsatisfactory conditions; and whether he will cause inquiry to be made into the matter?

Mr. HARMSWORTH: I have no official information on the subject, but I understand that a private telegram has been received in England from passengers by this vessel complaining of their detention. A telegram has been sent to General Allenby to ask for particulars.

Oral Answers to Questions — CEYLON.

Mr. JOHN DAVISON: 43.
asked the Under-Secretary of State for the Colonies whether he will state the reasons for the Government's statement that they are not prepared to publish the proposals of the Governor of Ceylon for constitutional reforms, and explain what facts stand in the way of the people of Ceylon being given an opportunity of discussing the proposed government which is to be applied to them in the same way as under similar circumstances an opportunity for discussion was given to the people of India?

The UNDER-SECRETARY Of STATE for the COLONIES (Lieut.-Col. Amery): As I stated in reply to the hon. Member for Kingswinford on the 7th July, the Secretary of State is not prepared to pub-
lish the Governor's proposals at present. He is still in correspondence with the Governor, but as soon as the proposals reach their final form, the question of publication will be again considered.

Oral Answers to Questions — BRITISH EMPIRE (NEW TERRITORY).

Mr. SIMM: 44.
asked the Under-Secretary of State for the Colonies if steps are being taken to report upon the natural resources and commercial prospects of new territory over which the British Empire has recently obtained control?

Lieut-Colonel AMERY: Yes, Sir. A considerable amount of existing information has already been collated, and steps are being taken to obtain further reports on the natural resources of these territories. As regards commercial prospects, the answer is in the affirmative. The territory in South-West Africa has been brought within the area of His Majesty's Trade Commissioners in South Africa and the territory in East Africa is to be specially investigated by the Trade Commissioner for British East Africa, who has recently been appointed by the Board of Trade. Samoa has already been reported on by His Majesty's Trade Commissioner in New Zealand, and steps are being taken to obtain information as to openings for British trade in the other territories.

Captain BENN: Will all countries have equal rights of trade with these mandated territories?

Lieut.-Colonel AMERY: Yes, Sir; I understand that, at any rate, in the case of these mandated territories which are not directly under the self-governing Dominions. The terms of the mandate being discussed are on the basis of equal facilities for all nations within the territories.

Oral Answers to Questions — SECONDARY SCHOOLS (STATE AID).

Captain LOSEBY: 45.
asked the Prime Minister if he is aware that considerable dissatisfaction has been caused by the action of the Board of Education in abolishing the democratic control of State-aided secondary schools without consulting Parliament; that the relaxation of the rule requiring State-aided secondary schools to provide 25 per cent. of their
places for children from primary schools has operated inequitably and has caused considerable discontent; that many Members are anxious to discuss these and other educational matters, but no opportunity has this year been given them; and if he is prepared to name a day upon which discussion can be taken?

Mr. BONAR LAW (Leader of the House): I do not agree that the alterations made in the draft Regulations which were issued on the 26th May abolish public control of State-aided secondary schools. There has been no relaxation in the administration of the rule relating to free places, and I have no evidence of such discontent as is implied in the hon. and gallant Member's question. I hope that time may be found for the Education Vote on one of the remaining Supply days.

Lieut.-Colonel Sir S. HOARE: Is the right hon. Gentleman aware that there is a great body of people interested in education who are delighted that the President of the Board of Education has made this alteration?

Oral Answers to Questions — REPRESENTATION OF THE PEOPLE ACT.

DEMOBILISED SOLDIERS.

Mr. STEWART: 46.
asked the Prime Minister whether a soldier under the age of twenty-one who was placed on the register of voters under the Representation of the People Act, 1918, is now that he is demobilised deprived of his vote until he has attained the age of twenty-one?

The PARLIAMENTARY SECRETARY to the MINISTRY of HEALTH (Major Astor): I have been asked to reply to the question of the hon. Member. I am unable to add anything to the reply given to the question on this subject which was put on the 16th April last by the hon. Member for Wednesbury, of which I am sending the hon. Member a copy.

Mr. STEWART: Could the hon. and gallant Gentleman say simply "Yes" or "No," because Regulations have been issued showing that these men have been deprived of their votes, and the Representation of the People Act seems to give them this right?

Major ASTOR: If the hon. Gentlemen will look at the reply to which I have referred him he will see there is some doubt.
My right hon. Friend the Minister of Health has no power to give a ruling on, the interpretation of an Act of Parliament.

Mr. STEWART: Has the register been examined? Who has the power, may I ask, to decide the question?

Major ASTOR: If there is any doubt it must be taken to appeal, either to the County Court or to the Court of Appeal.

Mr. STEWART: How can a young soldier of nineteen pay the expense of going to the Court of Appeal?

An HON. MEMBER: Will the hon. Gentleman consider the introduction of legislation to settle this point?

Major ASTOR: I will put that point to my right hon. Friend.

Mr. DEVLIN: Has the hon. and gallant Gentleman asked the opinion of the English Attorney-General on this question, or is he too busy dealing with Ireland?

Oral Answers to Questions — FOREIGN TRADE (GOVERNMENT POLICY).

Mr. GIDEON MURRAY: 47.
asked the Prime Minister whether any change has been made in the policy of the Government with regard to foreign trade?

Sir A. GEDDES: I have been asked to answer this question. No change has been made in the policy of the Government with regard to foreign trade.

Mr. MURRAY: Will the Leader of the House tell us whether the resignation of the hon. Gentleman the Member for the Erdington Division of Birmingham (Sir A. Steel-Maitland) was due to a difference of opinion regarding our foreign trade policy? Was that so?

Mr. BONAR LAW: The reasons for resignation were given in the letter of my hon. Friend. I know nothing beyond that.

Mr. G. LAMBERT: Will the right hon. Gentleman tell us when he proposes to make his statement regarding the changes which are alleged to be taking place regarding the policy of the Government in respect to the trade of the country?

Mr. BONAR LAW: If the right hon. Gentleman means the statement in regard to the trade policy of the Government, I hope to be able to make it before the Recess.

Captain BENN: May I inquire how far the policy of which the right lion. Gentleman is going to make an announcement, is compromised by the Budget?

Mr. BONAR LAW: In no direction at all.

Oral Answers to Questions — TRADE AND COMMERCE.

FAR EAST (EXPORT TRADE).

Sir J. D. REES: 49.
asked the Prime Minister whether the Government proposes to appoint a Commission to visit the Far East, in order to inquire into the export trade of cotton goods and yarn?

Sir A. GEDDES: I have been asked to answer this question. The matter is under consideration. I hope to be able to make an announcement at an early date.

LONG-TEEM CREDITS.

Mr. G. MURRAY: 93.
asked the President of the Board of Trade whether he has yet concluded any arrangements far providing long-term credit facilities in European countries which are not yet in a position to pay at present by means of exports for essential imports; whether he is aware of the urgency of this question if the United Kingdom is to retain its good will in those countries and to foster its export trade; and whether he will state what steps it is proposed to take?

Sir A. GEDDES: I am fully aware of the urgency of the question raised by the hon. Member, and the Government are at present considering it. I hope soon to be in a position to make a statement on the subject.

Mr. MURRAY: Can I have an answer next week?

Sir A. GEDDES: I hope it may be possible.

Mr. MURRAY: By Wednesday?

Sir A. GEDDES: It may be possible by next Monday.

AVONMOUTH PORT (CONGESTION).

Mr. INSKIP: 96.
asked the President of the Board of Trade whether he is aware of the increasing congestion of the port of Avonmouth, and that on 16th July the number of empty open trucks in Avon-mouth docks was thirty-eight, whereas the number required for the day's loading was
482, and the total requirements for traffic then in sheds and ordered away was 3,192; whether the available trucks are being used to the best possible advantage; and what steps are being taken to increase the supply of trucks at Avonmouth and to stop the further congestion of the port?

Sir A. GEDDES: I am aware that there is a congestion of traffic and shortage of trucks at Avonmouth and other ports. The situation cannot be regarded from the point of view of any particular port, and I can only say that every step possible under the present difficult circumstances is being taken to provide a remedy.

WATER TRANSIT.

Mr. INSKIP: 97.
asked the President of the Board of Trade whether he is aware that Government Departments do not make the fullest use of available water transit; and whether, in view of the congestion on the railways, steps can be taken in the case of Government traffic to use water transit when it is available?

Sir A. GEDDES: I should be glad if my hon. and learned Friend would give me particulars of any case he may have in mind, in order that I may be able to take the matter up with the Department concerned.

Oral Answers to Questions — PROFITEERING (SELECT COMMITTEE).

Mr. HIGHAM: 50.
asked the Prime Minister if he is in a position to inform the House of the names of those who will constitute the Select Committee on Profiteering; what are its terms of reference; docs the Government intend to take any action re profiteering pending the Report of this Select Committee; and, if not, will he explain the reason for not taking drastic action with those who are known to be overcharging the poor for coal and food?

Mr. BONAR LAW: As regards the first part of the question, the names and terms of reference appear on the Order Paper to-day. As regards the second and third parts, I cannot add anything to previous replies on this subject.

Captain W. BENN: Do the terms of reference include the effect of the import restrictions on prices?

Mr. BONAR LAW: I have no doubt that will be considered, but it is not included. The Government deliberately excluded it and other economic considerations from the scope of the inquiry on account of the time, and because there was a desire to come to an early decision.

Oral Answers to Questions — ALCOHOL MOTOR FUEL.

Mr. MANVILLE: 51.
asked the Prime Minister what action, if any, has been taken to give effect to recommendation No. 17 of the Interdepartmental Committee on alcohol motor fuel, which Committee reported under date the 23rd June last (Command Paper No. 218) that an official organisation, permanent in character and provided with the necessary funds, should be established forthwith by the Government to encourage and develop the production and utilisation of power alcohol within the Empire as a fuel alternative to petrol?

Mr. BONAR LAW: The Report has been referred to the Scientific and Industrial Research Department, with special reference to the Recommendation No. 17, and the question is at the moment under consideration.

Oral Answers to Questions — INDUSTRIAL SITUATION.

DEVELOPMENT WORK.

Mr. C. EDWARDS: 52.
asked the Prime Minister the total sums of money for which sanction has been given by the Coal Controller or the Treasury to the colliery concerns of the United Kingdom for development work or other capital expenditure out of their profits since the institution of the Coal Control; and if he will cause a Return to be presented to this House showing these sums for each individual colliery concern in the United Kingdom?

Sir A. GEDDES: I regret that I cannot give the information desired, as information such as this which has been obtained from the collieries under Sections 17–19 of the Coal Mines Control Agreement (Confirmation) Act, 1918, must, by the provisions of Section 20 of that Act, be treated as strictly confidential.

Mr. EDWARDS: Does that mean that this House is to be called upon to vote in favour of increased price for coal without being placed in possession of the aggregate
figures under this head? If the right hon. Gentleman cannot give details of the collieries concerned, can he inform the House of the total sum of money which has been sanctioned by either the Coal Controller or the Treasury to be devoted out of profits by way of capital expenditure?

Sir A. GEDDES: I will look into that.

COAL OUTPUT

Mr. REMER: 53.
asked the Prime Minister whether he will appoint a small committee to inquire into the statements by the miners' leaders in this House as to the cause of the restricted output in collieries with a view to immediately having these causes removed?

Mr. BONAR LAW: I do not think that my hon. Friend's suggestion is at present practicable.

Lord H. CAVENDISH-BENTINCK: 55.
asked the Prime Minister whether, in the hope of obviating the threatened increase in the price of coal, he will call a conference of representatives of coal-owners and miners with the object of discussing whether by the exercise of the principles of co-operation and conciliation the output of coal can be increased?

Sir A. GEDDES: I have been asked to answer this question. The increase of 6s. per ton in the price of coal came into force on the 21st July. I need hardly assure the Noble Lord that the question, of the output of coal is receiving the most urgent consideration of the Government.

COLLIERIES AND FACTOIMKS (PRODUCTION).

Mr. REMER: 54.
asked the. Prime Minister whether he will institute a national campaign to impress upon all concerned the importance of increased production in collieries and factories?

Mr. BONAR LAW: It if not possible to exaggerate the importance of increasing output, and the Government are doing what they can in the direction suggested by the question.

Mr. G. TERRELL: Is there any further news with regard to the mining output?

Mr. BONAR LAW: I have asked the Department concerned to send me at the end of questions any further information received, and if the question be then repeated, I will answer it

Mr. HOUSTON: In view of the great success which attended the Prime Minister's efforts during the War I would like to know whether he and other members of the Government will adopt similar measures to rouse the country to a sense of the danger which it has to face?

Mr. BONAR LAW: I have discussed that very point with the Prime Minister this morning. I think it is just as urgent as any problem of the War.

Mr. REMER: With regard to the cost of living, have any arrangements been made for considering the cost of the products in collieries and factories as far as it is affected by output, and will this question be considered by the Committee which appears on the Order Paper to-day? The terms of reference to that Committee only refer—

Mr. SPEAKER: The hon. Member had better put his question on the Paper.

WOMEN'S WAGES.

Major HILLS: 59.
asked whether the Government intend to adopt the recommendations with regard to the relationship of women's wages to men's, contained in the War Cabinet Committee's Report on Women in Industry; and, if they do, whether he will take immediate steps, in cases where the Government is a direct employer, to see that these wages are paid, and where the Government employs a contractor to amend if necessary the Fair-Wages Resolution, so that it may cover women's wages in the sense laid down by the Report?

Sir R. HORNE: I have been asked to reply to this question. I am afraid it is not possible at present to add anything to the reply given by the Leader of the House to a similar question on the 9th July.

YORKSHIRE COLLIERIES.

Mr. GEORGE BALFOUR: 60.
asked the Prime Minister if he is aware that the engine-drivers and pump-men in the Yorkshire collieries are ready and anxious to work, and that they are forcibly prevented from returning to duty by members of their trade union; and what action he proposes to take to restore to the men referred to the right to return to work?

Sir R. HORNE: I have been asked to reply to this question. I understand that the engine-drivers and pump-men who are on strike in the Yorkshire coalfields have
ceased work in pursuance of a decision arrived at by the council of the Yorkshire Miners' Association. I have no evidence as yet that the men in question are desirous of resuming work.

Mr. BALFOUR: Is the hon. Member aware that the hon. Member for Attercliffe (Mr. Casey) got his information from personal observation in the pits on Monday last?

Sir R. HORNE: I have not received any information to that effect.

Mr. CASEY: Will the right hon. Gentleman give protection to the engine-men and pump-men who have nothing to do with this dispute between the miners and the coal-owners and who want to continue working to keep the collieries in safety; will ho extend protection to these men who want to work and who are kept from working by threats of violence by men belonging to the unions; and will he withdraw the Navy men, who are absolutely unnecesary because the men who work these machines want to work them and the naval men are simply putting in black leg labour while the men are walking the streets and want to work?

Sir R. HORNE: The Government have already made it perfectly clear, in the first place, that wherever any of the regular workmen are prepared to do their duty they will have ample protection; in the second place, they have also made it plain that wherever the regular workmen return to their duty in those cases the naval men will be withdrawn.

Mr. BALFOUR: Will the right hon. Gentleman give them protection in order to allow them to return to their work, be-cause they cannot get there from their homes at present?

Sir R. HORNE: Certainly that will be done wherever the information is given to me that protection is required. If the hon. Member for Attercliffe will give me the necessary information I shall be glad of an opportunity to discuss the matter with him.

Mr. TERRELL: Is the right hon. Gentleman aware that there is a certain daily paper which has referred to these naval men who have been sent to help as naval blacklegs, and does he propose to take any action in connection with that matter?

Mr. SPEAKER: That question does not arise.

Lieut.-Commander KENWORTHY: (by Private Notice) asked the First Lord of the Admiralty whether the men sent from the Fleet to work the mining pumps are volunteers for that work; and why naval stokers are being used for this purpose instead of troops?

Mr. LONG: The answer to the first part of the question is in the negative. Naval stokers were selected owing to their technical knowledge of the work to be performed.

Sir D. MACLEAN: Has the Leader of the House any information he can give us with regard to the coal strike?

Mr. BONAR LAW: The present position of the mines in Yorkshire is as follows: Six collieries have been flooded. Seventeen are in danger owing to the withdrawal of winding enginemen, and the boiler fires, and some of them have even been put out by the strikers. At six collieries naval ratings have been asked for and have been set to work. The total number of naval ratings now employed to keep the mines free is 158. There has been no interference with the men who are giving this assistance. The strike is spreading in Derbyshire, and at two pits pumping has been stopped. These are reaching a condition of danger, and naval ratings are being sent to-day-to help in the pumping. In Lancashire and Nottingham the situation has not changed. In South Wales a, resolution has been adopted that the men are to remain at work pending negotiations with the Government regarding piece rates. A considerable number of men are, however, still on strike.

Mr. TERRELL: Is not the strike in Yorkshire a strike authorised by the Yorkshire Miners' Association, and is it not in substance a strike against the nation, and under the circumstances, does the Government propose to allow the union to pay strike pay?

Mr. BONAR LAW: All considerations of that kind are being taken into account by the Government. It is a fact that it was authorised by the Yorkshire Miners' Union but not by the Miners' Federation.

Mr. GRUNDY: Is it a fact that the Prime Minister is meeting a deputation from the Federation to-morrow, and is it altogether wise that questions of this
character should be put, because there is another side to the whole case, and it is not easy to place responsibility for the strike on anyone. In view of the fact, if it is a fact, that this meeting is to take place, I think the wisest thing we can do is to avoid discussion.

Mr. BONAR LAW: I am sure the hon. Member will realise that every statement made by the Government has avoided any appearance of provocation. It is a fact that the Miners' Executive are meeting the Prime Minister and myself tomorrow.

An HON. MEMBER: Have the pit ponies been removed?

Mr. BONAR LAW: The information is that they have generally been taken out.

COAL COMMISSION (SANKEY AWARD).

Mr. SIMM: 95.
asked the President of the Board of Trade if he will consider the advisability of giving immediate effect to the recommendations in the Coal Commission Report not requiring legislation, particularly many of the recommendations contained in the Report of Sir Arthur Duckham, and will appoint committees consisting of mining engineers, miners, and coal-owners to carry into effect such recommendations as are agreed upon subject to the sanction of the Board of Trade?

Sir A. GEDDES: The whole of the recommendations in the Reports are receiving the earnest consideration of the Government, but I am not in a position at the present time to make a statement on the subject.

Oral Answers to Questions — TOTALISATOR.

Lieut.-Col. MEYSEY-THOMPSON: 56.
asked whether, in view of the fact that the French public in one year invested £13,000,000 in the totalisator; that the Government received 8 per cent. of this sum, 4 per cent. went back to racing, 2 per cent. to the support of hospitals, 1 per cent. to the direct encouragement of horse-breeding, and 1 per cent. to other useful purposes such as waterworks, etc., he will at once introduce legislation with the view of obtaining similar beneficial results in this county?

Mr. BONAR LAW: I do not think that it would be desirable to adopt my hon. and gallant Friend's suggestion.

Lieut.-Colonel MEYSEY-THOMPSON: Is the hon. Gentleman aware that the success of our Armies during the War vas largely due to the number of high-class horses supplied by private breeders; is he also aware that the totalisator would greatly encourage the breeding of horses; and will he give the matter further consideration?

Mr. BONAR LAW: I am afraid that I am not very familiar with the instrument to which my hon. and gallant Friend refers, but I do not think the objects he has in view would be attained by the Government taking the special action he suggests.

Lieut.-Colonel MEYSEY-THOMPSON: I beg to give notice that I shall bring this matter up on the Motion for the Adjournment to-night, and I will further explain the subject to the right hon. Gentleman.

Oral Answers to Questions — PEACE CELEBRATIONS (OFFICE OF WORKS).

Sir HARRY BRITTAIN: 57.
asked the Prime Minister whether he will consider the possibility of offering an expression of appreciation to those members of the staff of the Office of Works for the excellent manner in which the organisation, hospitality, and decorations were carried out: in the very short time available during the recent Peace celebrations?

Mr. BONAR LAW: I am obliged to my hon. Friend for putting this question. I am sure that the House will join in the congratulations which have been already expressed by the Cabinet to all those concerned with the organisation of the Peace celebrations.

Captain REDMOND: Does the right hon. Gentleman consider it advisable that those who were responsible for the erection of the stand for the Members of the House last Saturday in the Mall should get some special distinction?

An HON. MEMBER: Can the right hon. Gentleman explain why there were no representatives in the procession from the Scottish Command?

Oral Answers to Questions — PERSIA (TROOPS AT KASVIN).

Mr. RUPERT GWYNNE: 69.
asked what arrangements are made for the well-being
of the troops stationed at Kasvin, Persia; and whether he is aware that complaints are being made that the food is insufficient, that the postal service is most irregular, and that the general conditions are very bad there?

Mr. FORSTER: No previous complaints have reached the War Office regarding the conditions at Kasvin. It is stated by an officer who passed through there in April that the troops were well hutted and that there was no shortage of food. The climatic conditions are much better than in Mesopotamia. As regards the postal arrangements, I understand that there was previously some delay in the case of mails which were sent viâ Mesopotamia, but arrangements have since been made for a new service from Constantinople. This should have resulted in a greatly improved delivery, and I hope that the troops stationed there will in future get their letters without any undue delay.

Mr. GWYNNE: Will the right hon. Gentleman have inquiries made as to the complaints?

Mr. FORSTER: Yes, if the hon. Member will be good enough to give me any information in his possession, I shall be glad to inquire.

Oral Answers to Questions — ROYAL ARMY SERVICE CORPS.

SOLDIER ORDERED TO EAST.

Mr. RENDALL: 70.
asked the Secretary for War whether Private G. H. Summer-bill, 77th Company, Royal Army Service Corps, A.P.O. S 24, who joined the Army in May, 1916, now on leave from France and living at Victoria Road, Morley Road, Soundwell, near Bristol, has boon instructed to join a draft to the East; whether this is contrary to the undertaking he gave last week; and will he have Private Summerbill immediately communicated with and the order countermanded?

Mr. FORSTER: I have ascertained that the soldier referred to comes under one of the categories of men who are not eligible for drafting to the East. Full instructions have recently been issued to the General Officer Commanding, France and Flanders, as to what men are or are not eligible for inclusion in the drafts of Royal Army Service Corps now being prepared in that country for service in the Middle East, but possibly these had not
reached Private Summerbill's Commanding Officer before he came on leave. He will, on return from leave, be withdrawn from the draft in accordance with the instructions I have mentioned.

GROVE PARK DEPOT.

Mr. JOYNSON-HICKS: 74.
asked how many men of the Army Service Corps are billeted or lodged in houses in or near I Grove Park, Kent; and how much vacant accommodation there is at that place in Army huts?

Mr. FORSTER: I regret that my inquiries are not yet complete, but I will write to my hon. Friend as soon as possible.

Oral Answers to Questions — EMPLOYMENT OF EX-SOLDIERS (WAR OFFICE).

Mr. JOYNSON-HICKS: 72.
asked whether eight ex-soldiers with an average oversea service of two years have within the last month been dismissed from No. 11 Section, Mob. 10, War Office, while eighty male civilians and twenty lady clerks are being retained; and whether this is by the authority of the Army Council?

Mr. FORSTER: Seven clerks have been discharged from this section, as its duties are coming to an end, and endeavours are being made to find other employment in the War Office for two of these who are disabled men. Of the remaining live, only one is an ex-soldier. The male civilians remaining in the section number twenty, and the majority of these are ex-soldiers. There are no women clerks serving in No. 11 Section.

Oral Answers to Questions — FISH MARKET, ABERDEEN (MILITARY OCCUPATION).

Mr. F. C. THOMSON: 77.
asked the Secretary of State for War whether he is aware that a considerable portion of the fish market of Aberdeen is used by the military authorities as a store for flax; that, in consequence thereof, great inconvenience and loss is being caused to the fishing trade by the lack of available space in the market for landing fish; and that, although authority was given last month for other accommodation to be hired and the flax removed from the fish market, the
flax has not been so removed; and whether he will give orders for its immediate removal?

Mr. KELLAWAY: I have been asked to answer this question. The answer to the first part of the question is. Yes, Sir. Arrangements are being pushed forward as rapidly as possible for the provision of other premises for the storage of the flax, in order that the shed in the fish market may be vacated.

Oral Answers to Questions — MACHINE GUN CORPS (DRAFTS FOR EGYPT).

Mr. ROBERT RICHARDSON: 78.
asked the Secretary for War if he is aware that, despite the Memorandum he has recently-issued stating specifically that no Derby men will be sent further from home than the Army of the Rhine, men of the 33rd Battalion, Machine Gun Corps, stationed at Rouen, France, are under orders for Egypt; and, as the majority of the men concerned attested under the Derby scheme, what steps does he propose to take to enforce the pledges he has given?

Mr. CHURCHILL: I am informed that all Derby men were specifically excluded when this unit was placed under orders for Egypt.

Oral Answers to Questions — ARMY OFFICERS (EDUCATION).

Lieut.-Colonel GUINNESS: 86.
asked the Secretary of State for War if he will state what provision is made in the Army Estimates for education of officers?

Mr. FORSTER: About £1,250,000.

Oral Answers to Questions — FOOD SUPPLIES.

CLAIMS INSPECTORS (SALARIES).

Mr. ROYCE: 87.
asked the Parliamentary Secretary to the Board of Agriculture whether the Board has received a communication from the Holland Farmers' Union relating to the appointment of claims inspectors connected with the guaranteed price of cereals; whether these inspectors are to receive £100 a year and all expenses for work involving less than a month full time; whether he is aware that in connection with these appointments the Holland Farmers' Union have characterised the expenditure of the Board as
profligate, especially at a time when the finance of the country is in such straitened circumstances; if he will say how many of these inspectors are contemplated by the Board; and what is the estimated total cost for the year?

The PARLIAMENTARY SECRETARY to the BOARD of AGRICULTURE (Sir Arthur Boscawen): The Board have received the communication to which the hon. Member refers. The State has incurred a contingent liability to pay claims by farmers under the guarantee of corn prices, and it is essential that such claims should be carefully checked by competent and independent inspectors. Hitherto, the agricultural returns have been voluntary and unchecked. Now that under the Corn Production Act possible payments from the Exechequer are dependent upon the accuracy of these returns, it is necessary to ascertain by a complete inspection what degree of error may be expected in the figures. From this year's complete inspection it will be possible to determine what percentage of claims ought to be inspected in future years in order to provide an adequate safeguard. Each inspector will be responsible for verifying and certifying the claims in respect of some 7,000 acres of corn. The fee for each inspector is fixed at £100, in addition to expenses on the Treasury scale. The number of corn claim inspectors in England and Wales is 1,065, and the total cost of this service is estimated at £200,000. The appointment of these inspectors is temporary and terminates on the 30th September. In future years a much smaller staff will be required.

Mr. ROYCE: Does the hon. Gentleman not regard this expenditure as prodigal, considering the amount of work to be done?

Sir A. BOSCAWEN: I think not. Having regard to the large contingent claims that may be made against the State this expenditure is well justified for the present year only.

Mr. ROYCE: Will the hon. Gentleman consider whether the men hitherto approached are the most suitable men for the work, and is not the amount to be paid greatly in excess of what the work justifies?

Sir A. BOSCAWEN: I do not think the payment is in excess having regard to the amount of work they will have to do. As regards the suitability of the men, every care has been taken in the selection of them.

Major HOWARD: Is the right hon. Gentleman aware that many of these men have no agricultural knowledge at all—that they are men out of drapers' shops, bicycle agents, and others?

Sir A. BOSCAWEN: I am not aware of that. If my hon. Friend will give me any specific cases I will inquire.

Mr. PRETYMAN: Were the war agricultural committees consulted in this matter—was that point considered?

Sir A. BOSCAWEN: Yes, Sir; but in view of the fact that the amount of work to be done was so great we came to the conclusion that it was necessary to appoint special inspectors

Oral Answers to Questions — WAR MEMORIAL

WHITEHALL CENOTAPH (REPLICA).

Captain ORMSBY-GORE: 89.
asked the First Commissioner of Works whether he will have an exact replica of the cenotaph now standing in Whitehall erected in Portland stone, with wreaths in bronze, on the same site as a permanent memorial to those who have fallen in the Great War?

Commander Viscount CURZOM: 90.
asked if the war memorial to the fallen in Whitehall can be permanently retained, or if it is proposed to re-erect a more permanent memorial elsewhere?

Mr. GILBERT: 91.
asked whether, in view of the public approval of the cenotaph erected in Whitehall for the Peace Procession, the Government will have a permanent monument of the same design erected in the same place or some other suitable public position in memory of the men who have been sacrified during the War?

Mr. WIGNALL: 92.
asked whether the First Commissioner of Works will consider the desirability of erecting a permanent cenotaph in Whitehall in view of the feeling that a memorial to those who fell in the War should be kept in the position of the present cenotaph?

The FIRST COMMISSIONER of WORKS (Sir Alfred Mond): The question of erecting a replica of the cenotaph now standing in Whitehall in permanent material either on its present site or some other position is one that must be decided by the Cabinet, and I will bring the wishes of hon. Members to the notice of Ministers.

Sir M. DOCKRELL: Would it not be possible to erect a replica of the memorial in the metropolis of Ireland—a country which contributed so many thousands of splendid soldiers to our forces?

Sir A. MOND: That question should be addressed to the Chief Secretary for Ireland.

Oral Answers to Questions — SOUTHERN RHODESIA.

Major LANE-FOX: (by Private Notice) asked the Under-Secretary of State for the Colonies what action it has been decided to take in connection with the Report of the Judicial Committee of the Privy Council in the special reference as to the ownership of the unalienated land in Southern Rhodesia?

Lieut.-Colonel AMERY: As I stated on the 2nd April, the British South Africa Company have approached the Secretary of State with a view to obtaining a settlement of the amount due to the company for its administrative expenditure in accordance with the Report of the Judicial Committee. The Secretary of State has now appointed a Commission to examine the Company's claim. The Commission will consist of Lord Cave, who will act as chairman, Lord Chalmers, and Sir W. Peat. The terms of reference are as follow:
WHEREAS under and by virtue of an ORDER of His Majesty in Council dated the 16th day of July, 1914, the question of the ownership of the unalienated land in Southern Rhodesia has been the subject of a Special Reference to the Judicial Committee of the Privy Council.
AND WHEREAS the Report of the Judicial Committee dated the 29th day of July, 1918 inter alia stated that so long as the British South Africa Company continues to administer Southern Rhodesia under His Majesty the Company is entitled to dispose of the unalienated lands in due course of administration and to apply the moneys or revenues derived there from in duly reimbursing all proper out-
lays on administrative account, in any current year or in past years and further if the Company's administration of Southern Rhodesia should be determined by His Majesty the Company would have the right to look to the Crown to secure to it, either out of the proceeds of further sales of the lands by whomsoever made or if His Majesty should grant away these lands or the proceeds to others from public funds, the due reimbursement of any outstanding balance of aggregated advances made by the Company for necessary and proper expenditure upon the administration of Southern Rhodesia.
AND WHEREAS by an Order of His Majesty in Council dated the 2nd day of August, 1918 (a copy whereof is appended hereto) His Majesty was pleased to approve of the said report.
AND WHEREAS the British South Africa Company has asked that the amount due to it for its administrative expenditure should be determined at the earliest possible moment, and submitted on the 21st of November, 1918, and on the 7th July, 1919, provisional statements (copies whereof are appended hereto) of net expenditure by the Company in connection with Southern Rhodesia on account of the Crown, up to the date of the Company's latest balance-sheet, that is to say, the 31st day of March. 1918.
NOW THEREFORE I, Viscount Milner, P.C., G.O.B., G.O.M.G., His Majesty's Secretary of State for the Colonies,
APPOINT YOU,
The Right Honourable Viscount Cave, P.O.,
The Right Honourable Lord Chalmers, P.C., G.C.B.,
Sir William Barclay Peat,
to be a Commission (whereof Viscount Cave shall be the Chairman) to examine the said statements of the British South Africa Company and to investigate the records and accounts of the Company in London and in Rhodesia and to make all such inquiries as may seem to you desirable and to take an account of what would be due to the Company in accordance with the said Report of the Judicial Committee of the Privy Council, if the administration of Southern Rhodesia by the Company had been determined on the 31st day of March, 1918.
I appoint Hugh Nimmo Tait, Esq., to be the Secretary to the Commission.

17th July, 1919.

Captain ORMSBY-GORE: Are the terms of reference confined to assessing the actual amount, or are they going to survey the whole question of the administration of the company and whether or not its expenditure has been extravagant?

Lieut.-Colonel AMERY: The terms of the reference are "to examine the statements of the British South Africa Company and to investigate the records and accounts of the company in London and in Rhodesia, and to make all such inquiries as may seem to be desirable.

Oral Answers to Questions — CENTRE PARTY (MR. CHURCHILL'S SPEECH).

Mr. DEVLIN: May I ask the Leader of the House when we may expect publication of the speech of the Minister for War to the Centre party the other day?

Mr. BONAR LAW: What on earth have 1 to do with that?

Mr. DEVLIN: Has not the right hon. Gentleman read the official communication stating that the speech of the Secretary fur War would be published to-day, and did not 700 expectant M.P.'s wake up early this morning in anticipation of that, but have not yet seen it?

Mr. BONAR LAW: Why not address that question to my right hon. Friend himself?

Mr. DEVLIN: I would have done, but he has just gone out.

Oral Answers to Questions — HOUSING AND TOWN PLANNING BILL.

Reasons for disagreeing to certain of the Lords Amendments reported, and agreed to.

To be communicated to the Lords.— [Dr Addison.]

Oral Answers to Questions — RESTORATION OF PRE-WAR PRACTICES (No. 3) BILL.

Reported, with Amendments, from Standing Committee A.

Report to lie upon the Table, and to be printed. [No. 144.]

Minutes of the Proceedings of the Standing Committee to be printed. [No. 144.]

Bill, as amended (in the Standing Committee), to be taken into consideration Tomorrow.

PRIVATE BUSINESS.

Poole Corporation Bill [Lords.]

Reported, with Amendments, from the Local Legislation Committee; Report to lie upon the Table, and to be printed.

NATIONAL ASSEMBLY OF THE CHURCH OF ENGLAND (POWERS) BILL [Lords.]

Read the first time; to be read a second time upon Tuesday next, and to be printed. [Bill 147.]

STANDING COMMITTEES (CHAIRMEN'S PANEL).

Mr. John William Wilson reported from the Chairmen's Panel: That they had appointed Mr. Rendall to act as Chairman of Standing Committee A (in respect of the Coal Mines Bill).
That they had appointed Mr. Mount to act as Chairman of Standing Committee D (in respect of the Police Bill).
That they had appointed Sir Watson Rutherford to act as Chairman of Standing Committee E (in respect of the Agricultural Land Sales (Restriction of Notices to Quit) Bill and the British Mercantile Marina Uniform Bill [Lords],

Report to lie upon the Table.

PALLIN'S DIVORCE BILL [Lords].

Reported, without Amendment, from the Select Committee on Divorce Bills, with Minutes of Proceedings; Report to lie-upon the Table.

Bill to be read the third time.

STONEY'S DIVORCE BILL [Lords].

Reported, without Amendment, from the Select Committee on Divorce Bills, with Minutes of Proceeding's; Report to lie upon the Table.

Bill to be read the third time.

PALLIN'S DIVORCE BILL [Lords] AND STONEY'S DIVORCE BILL [Lords]

Ordered,
That the Minutes of Evidence and Proceedings in the House of Lords on the Second Reading of Pallin's Divorce Bill [Lords] and Stoney's Divorce Bill [Lords], together with the documents deposited in each, case, be returned to the House of Lords.—[Sir Henry Craik.]

SUPPLY (STANDING COMMITTEE C).

Mr. John William Wilson reported from Standing Committee C that they Lad agreed to the following Resolutions:—

CIVIL SERVICES ESTIMATES, 1919–20.—Class V.

1."That a sum, not exceeding £1,164,797, be granted to His Majesty, to complete the sum necessary to defray the Charge which will come in course of payment during the year ending on the 31st day of March, 1920, for the Expenses in connection with His Majesty's Embassies, Missions, and Consular Establishments Abroad, and other Expenditure chargeable to the Consular Vote."

Class II.

2."That a sum, not exceeding £1,312, be granted to His Majesty, to complete the sum necessary to defray the Charge which will come in course of payment during the year ending on the 31st day of March, 1920, for the Salaries and Expenses of the Office of the Commissioners of Charitable Donations and Bequests for Ireland."

3."That a sum, not exceeding £34,757, be granted to His Majesty, to complete the sum necessary to defray the Charge which will come n course of payment during the year ending on the 31st day of March, 1920, for the Salaries and Expenses of the Office of Public Works in Ireland."

Resolutions to be reported To-morrow.

SELECTION (STANDING COMMITTEES).

STANDING COMMITTEE A.

Sir SAMUEL ROBERTS reported from the Committee of Selection; That they had added to Standing Committee A the following Ten Members (in respect of the Coal Mines Bill): Mr. Adamson, Mr. Baird, Sir John Harmood-Banner, Sir Clifford Cory, Mr. Gilbert, Mr. Thomas Lewis, Mr. Robert McLaren, Mr. Stephen Walsh, Mr.. Aneurin Williams, and Captain Stanley Wilson.

Sir SAMUEL ROBERTS further reported from the Committee: that they had added the following Members to Standing Committee A (for the consideration of the Coal Mines Bill): Sir David Davies, Mr. Grattan
Doyle, Brigadier-General Hickman, Mr. Robert Richardson, and Colonel Penry Williams.

STANDING COMMITTEE D).

Sir SAMUEL ROBERTS farther reported from the Committee: that they had added to Standing Committee D the following Ten Members in respect of the Police Bill: Mr. Baird, Major Barnes, Mr. Briant, Lieut.-Commander Chilcott Mr. Clynes, Colonel Greig, Major Nall, Captain O'Grady, Mr. Remer. and Mr. Shortt.

Sir SAMUEL ROBERTS further reported from the Committee: that they had added the following Members to Standing Committee D (for the consideration of the Police Bill): Major Boyd-Carpenter, Mr. James Brown, Colonel Burn, and Dr. Murray.

STANDING COMMITTEE E.

Sir SAMUEL ROBERTS further reported from the Committee; That they had added the following Ten Members to Standing Committee E (in respect of the British Mercantile Marine Uniform Bill [Lords]: Major Cayzer, Sir Clifford Cory, Mr. Alfred Davies, Mr. John Guest, Mr. Houston, Lieut.-Commander Kenworthy, Sir Owen Philipps, Sir William Seager, Major Waring, and Colonel Leslie Wilson.

Sir SAMUEL ROBERTS further reported from the Committee; That they had added to Standing Committee Ethe following Fifteen Members (in respect of the Agricultural Land Sales (Restriction of Notices to Quit) Bill: Mr. Ac-land, Major Barnston, Sir Francis Blake, Sir Arthur Griffith-Boscawen, Mr. Bromfield. Mr. Cautley, Mr. Thomas Davies, Colonel Fitzroy, Mr. Haydn Jones, Mr. Lambert. Mr. Pretyman, Mr. Royce, Lieut.-Colonel Royds, Mr. Waterson, and Sir Richard Winfrey.

Sir SAMUEL ROBERTS further reported from the Committee; That they had added to Standing Committee E the following Member: Mr. Robert McLaren.

Reports to lie upon the Table.

MESSAGE FROM THE LORDS.

That, they have passed a Bill, intituled, "An Act to amend the Law of Intestate Moveable Succession in Scotland." [Intestate Moveable Succession (Scotland)' Bill [Lords.]

BILL PRESENTED.

EXPIRING LAWS CONTINUANCE BILL,—"to continue certain expiring Laws," presented by Mr. BALDWIN; to be read a second time To-morrow, and to be printed. [Bill 146.]

BUSINESS OF THE HOUSE.

Motion made, and Question proposed,
That the Third Heading of the Finance Bill may be taken immediately after the Consideration of the Bill, as amended, notwithstanding the practice of the House as to the interval between the various stages of a Bill relating to finance."—[Mr. Bonar Law.]

Sir D. MACLEAN: This Motion has been put on the Paper by agreement between the Chancellor of the Exchequer and those who sit on the Front Opposition Bench. I should not like it to pass without saying, first of all, that the right hon. Gentleman will agree with me that while the Opposition has been vigorous in its criticism, we have not in any way been obstructive. He will also agree that this is an unusual Motion. It often happens with other Bills, but on a Finance Bill it is very unusual. I wish to place it on record that we have agreed to it now because of the altogether exceptional circumstances in which the House finds itself in regard to business. The vacation is rapidly approaching and an immense amount of very important business has to be put through, and it is only because of that that we have assented to the Motion.

Mr. CHAMBERLAIN: I rise to respond to the appeal of the right hon. Gentleman and to say I agree with him that the procedure which we are following to-day, though not unknown, is exceptional and should be abnormal and only resorted to in special circumstances. The Government suggested it in the belief that it would really meet the general convenience and wishes of the House and not with any desire, I need scarcely say, to deprive the House of legitimate opportunities of discussion which it might wish to exercise. At the same time I desire to record my personal obligation to the right hon. Gentleman for the friendly spirit in which he met the proposal and also to the right hon. Gentleman. (Mr. Adamson). The discussions on the Budget have been conducted in a very reasonable way. The right hon. Gentleman's claim that there has been no obstruction is amply justified.

Mr. SIDNEY ROBINSON: I do not think this matter can be dismissed in the few words of explanation that we have had. I do not want to stand in the way

of the business of the House being carried on, but this is really a most important matter and one that has become of late years even more important than in the past. There is a tradition that the Finance Bill, of all others, should never be carried through two stages in the course of the same sitting. We were obliged to suspend that rule for the period of the War, and no doubt it was right and necessary that it should be done, but tome of us are crying out for a return to the same methods of finance, and we think that, side by side with the same methods of finance, should come the same methods of conducting the business of the House as regards finance. This Bill has to be discussed and decided in this House alone. We are the trustees for the finances of the country. We are going to make several alterations in it— the Chancellor of the Exchequer has some ten alterations to make—and we are to pass the Third Reading on the same day There were protests, the other evening, as regards our action in passing so important a measure as the Peace Treaty between three and four o'clock on Tuesday morning. There was a great deal of substance in that protest, and so there will be again if we go on and pass this Bill in this hurried way. Only last night there was quite a departure from precedent in the way the Housing Bill was carried through. I know it was just within the four corners of the Rules or Mr. Speaker would not have allowed it, but it was certainly a departure from precedent in allowing control of matters in the House to slip out of his hands. This is the most important Bill the House has ever passed, and yet we are going to rush it through. It is altogether inadequate in its method of raising taxation, and it should receive a great deal more criticism than at has had. I very strongly protest against it, and I only wish hon. Members would feel so strongly that they would divide against it and insist on having an interval before the Third Reading.

Question put,
That the Third Heading of the Finance Bill may be taken immediately after the Consideration of the Bill, as amended, notwithstanding the practice of the House as to the interval between the various stages of a Bill relating to Finance.

The House divided: Ayes, 288; Noes, 5.

Division No. 77.]
AYES.
[4.0 p.m.


Acland, Rt. Hon. Francis Dyke
Allen, Col. William James
Atkey, A. R.


Adamson, Rt. Hon. William
Amery, Lieut-Colonel L. C. M. S.
Bagley, Captain E. A.


Agg-Gardner, Sir James Tynte
Archdale, Edward M
Baird, John Lawrence


Ainsworth, Captain C.
Astbury, Lieut.-Com. F. W.
Baldwin, Stanley


Barnes, Rt. Hon. G. N. (Gorbals)
Gilmour, Lieut.-Colonel John
Mitchell, William Lane


Barnston, Major Harry
Glanville, Harold James
Moles, Thomas


Beauchamp, Sir Edward
Glyn, Major R.
Mond, Rt. Hon. Sir Alfred Moritz


Beckett, Hon. Gervase
Graham, D. M. (Hamilton)
Moreing, Captain Algernon H.


Bellairs, Com. Carlyon W.
Grant, James Augustus
Morison, T. B. (Inverness)


Benn, Sir Arthur S. (Plymouth)
Greame, Major P. Lloyd
Morrison, H. (Salisbury)


Benn, Capt. W. (Leith)
Green, J. F. (Leicester)
Mount, William Arthur


Bennett, T. J.
Greene, Lt.-Col. W. (Hackney, N.)
Murray, Lt.-Col. Hon. A. C. (Aberdeen)


Bentinck, Lt.-Col. Lord H. Cavendish.
Greenwood, Col. Sir Hamar
Murray, Major C. D. (Edinburgh, S.)


Betterton, H. B.
Greig, Colonel James William
Murray, Dr. D. (Western Isles)


Bigland, Alfred
Griffiths, T. (Pontypool)
Murray, Hon. G. (St. Rollox)


Bird, Alfred
Gritten, W. G. Howard
Nelson, R. F. W. R.


Blair, Major Reginald
Grundy, T. W.
Newman, Major J. (Finchley, M'ddx.)


Blake, Sir Francis Douglas
Guest, J. (Hemsworth, York)
Nicholl, Com. Sir Edward


Borwick, Major G. O.
Guinness, Lt.-Col. Hon. W. E. (B. St E.)
Nicholson, R. (Doncaster)


Boscawen, Sir Arthur Griffith-
Gwynne, R. S.
Nicholson, w. (Petersfield)


Bowerman, Right Hon. C. W.
Hacking, Captain D. H.
O'Grady, James


Bowles, Col. H. F.
Hallwood, A.
Ormsby-Gore, Hon. William


Bowyer, Captain G. W. E.
Hallas, E.
Palmer, Brig.-Gen. G. (Westbury)


Boyd-Carpenter, Major A.
Hambro, Angus Valdemar
Parker, James


Brace, Rt. Hon. William
Harmsworth, Cecil B. (Luton, Beds.)
Parry, Major Thomas Henry


Brassey, H. L. C.
Harris, Sir H. P. (Paddington, S.)
Pease, Rt. Hon. Herbert Pike


Breese, Major C. E.
Hayward, Major Evan
Perkins, Walter Frank


Briant, F.
Henderson, Major V. L.
Pinkham, Lieut.-Col. Charles


Brittain, Sir Harry E.
Henry, Denis S. (Londonderry, S.)
Pownall, Lieut.-Colonel Assheton


Brown, Captain D. C. (Hexham)
Herbert, Denniss (Hertford)
Pratt, John William


Brown, J. (Ayr and Bute)
Higham, C. F. (Islington, S.)
Pretyman, Rt. Hon. Ernest G.


Bruton, Sir J.
Hilder, Lieut.-Colonel F.
Purchase, H. G.


Buchanan, Lieut.-Colonel A. L. H.
Hills, Major J. W. (Durham)
Raeburn, Sir William


Buckley, Lt.-Col. A.
Hinds, John
Randles, Sir John Scurrah


Bull, Right Hon. Sir William James
Hirst, G. H.
Raper, A. Baldwin


Burgoyne, Lt.-Col. Alan Hughes
Hoare, Lt.-Col. Sir Samuel J. G.
Ratcliffe, Henry Butler


Burn, Colonel C. R. (Torquay)
Hodge, Rt. Hon. John
Remer, J. B.


Burn, T. H. (Belfast)
Hogge, J. M.
Remnant, Col. Sir J. Farquharson


Butcher, Sir J. G.
Hohler, Gerald Fitzroy
Rendall, Athelstan


Campbell, J. G. D.
Hope, James Fitzalan (Sheffield)
Renwick, G.


Carew, Charles R. S. (Tiverton)
Hope, Lt.-Col. Sir J. (Midlothian)
Richardson, R. (Houghton)


Carr, W. T.
Hopkins, J. W. W.
Roberts, F. O. (W. Bromwich)


Casey, T. W.
Hopkinson, Austin (Mossley)
Roberts, Rt. Hon. George H. (Norwich)


Chamberlain, Rt. Hon. J. A. (Birm., W.)
Horne, Sir Robert (Hillhead)
Roberts, Sir S. (Sheffield, Ecclesall)


Cheyne, Sir William Watson
Houston, Robert Paterson
Robinson, T. (Stretford, Lancs.)


Child, Brig-General Sir Hill
Howard, Major S. G.
Rodger, A. K.


Clay, Captain H. H. Spender
Hughes, Spencer Leigh
Rose, Frank H.


Clough, R.
Hurd, P. A.
Roundell, Lieut.-Colonel R. F.


Colvin, Brigadier-General R. B.
Inskip, T. W. H.
Rowlands, James


Conway, Sir W. Martin
Jackson, Lieut.-Col. Hon. F. S. (York)
Royce, William Stapleton


Coote, William (Tyrone, S.)
Jodrell, N. P.
Samuel, Rt. Hon. Sir H. (Norwood)


Cory, Sir James Herbert (Cardiff
Jones, Sir Evan (Pembroke)
Seager, Sir William


Cowan, D. M. (Scottish University)
Jones, J. Towyn (Carmarthen)
Seely, Maj.-Gen. Rt. Hon. John


Craik, Right Hon. Sir Henry
Kellaway, Frederick George
Shaw, Hon. A. (Kilmarnock)


Croft, Brig.-General Henry Page
Kelly, Major Fred (Rotherham)
Short, A. (Wednesbury)


Crooks, Rt Hon. William
Kenworthy, Lieut-Commander
Shortt, Rt. Hon. E. (N'castle-on-T., W.)


Curzon, Commander Viscount
Kenyon, Barnet
Simm, Colonel M. T.


Davidson, Major-Gen. Sir John H.
Kidd, James
Sitch, C. H.


Davies, Alfred Thomas (Lincoln)
Kinloch-Cooke, Sir Clement
Smith, Capt. A. (Nelson and Colne)


Davies, Sir D. S. (Denbigh)
Knight, Capt. E. A.
Sprot, Colonel Sir Alexander


Davies, T. (Cirencester)
Lambert, Rt. Hon. George
Stanier, Captain Sir Beville


Davison, J. E. (Smethwick)
Lane-Fox, Major G. R.
Stanley, Colonel Hon. G. F. (Preston)


Davison, Sir W. H. (Kensington)
Law, A. J. (Rochdale)
Stanton, Charles Butt


Dewhurst, Lieut.-Com. H.
Law, Right Hon. A. Bonar (Glasgow)
Stephenson, Colonel H. K.


Dockrell, sir M.
Lewis, Rt. Hon. J. H. (Univ. Wales)
Sturrock, J. Leng-


Donald, T.
Lewis, T. A. (Pontypridd, Glam.)
Surtees, Brig.-General H. C.


Doyle, N. Grattan
Lister, Sir R. Ashton
Sutherland, Sir William


Duncannon, Viscount
Lloyd, George Butler
Swan, J. E. C.


Du Pre, Colonel W. B.
Locker-Lampson, Com. D. (Hunt'don)
Sykes, Col. Sir A. J. (Knutsford)


Edge, Captain William
Long, Rt. Hon. Walter
Talbot, G. A. (Hemel Hempstead)


Edwards, Major J. (Aberavon)
Lonsdale, James R.
Taylor, J. (Dumbarton)


Edwards, J. H. (Glam., Neath)
Lorden, John William
Thomas, Brig.-Gen. Sir O. (Anglesey)


Eatwistle, Major C. F.
Loseby, Captain C. E.
Thomson, F. C. (Aberdeen, S.)


Falle, Major Sir Bertram Godfray
Lowe, Sir F. W.
Thomson, T. (Middlesbrough, W.)


Farquharson, Major A. C.
Lowther, Col. Claude (Lancs., Lons.)
Thorne, G. R. (Wolverhampton, E.)


Fell, Sir Arthur
M'Donald, Dr. B. F. P. (Wallasey)
Tickler, Thomas George


FitzRoy, Capt. Hon. Edward A.
M'Guffin, Samuel
Townley, Maximilan G.


Flannery, Sir J. Fortescue
M'Laren, R. (Lanark, N.)
Waddington, R.


Forestier-Walker, L.
Maclean, Neil (Glasgow, Govan)
Walsh, S. (Ince, Lancs.)


Fraser, Major Sir Keith
Maclean, Rt. Hon. Sir D. (Midlothian)
Walton, J. (York, Don Valley)


Galbraith, Samuel
McMicking, Major Gilbert
Ward, Colonel L. (Kingston-upon-Hull)


Gange, E. S.
Macnamara, Rt. Hon. Dr. T. J.
Wardle, George J.


Ganzoni, Captain F. C.
Mallaby-Deeley, Harry
Waring, Major Walter


Gardiner, J. (Perth)
Malone, Col. C. L. (Leyton, E.)
Warner, Sir T. Courtenay T.


Gardner, E. (Berks, Windsor)
Malone, Major P. (Tottenham, S.)
Warren, Sir Alfred H.


Geddes, Rt. Hon. Sir A. C. (Basingstoke)
Manville, Edward
Waterson, A. E.


Gibbs, Colonel George Abraham
Meysey-Thompson, Lt.-Col. E. C.
Watson, Captain John Bertrand


Gilbert, James Daniel
Middlebrook, Sir William
Wedgwood, Colonel Josiah C.




Weigall, Lt-Col, W. E. G. A.
Williams, Col. Sir R. (Dorset, W.)
Yate, Colonel Charles Edward


Wheter, Colonel Granville C. H.
Wilson, Rt. Hon. J. W. (Stourbridge)
Yeo, Sir Alfred William


Whitla, Sir William
Wilson, Colonel Leslie (Reading)
Young, Robert (Newton, Lanes.)


Wigan, Brigadier-General John Tyson
Wilson, Col. M. (Richmond, Yorks.)
Young, William (Perth and Kinross)


Willey, Lt.-Col. F. V.
Wilson, W. T. (Westhoughton)



Williams, A. (Conset, Durham)
Wood, Major Hon. E. (Ripon)
TELLERS FOR THE AYES.—Capt.


Williams, Lieut.-Com. C. (Tavistock)
Wood, Sir H. K. (Woolwich, W.)
Guest and Colonel Sanders.


Williams, Col. P. (Middlesbrough)
Wood, Major Mackenzie (Aberdeen, C.)



Williams, Lt.-Col, Sir R. (Banbury)
Woolcock, W. J. U.



NOES.


Gretton, Col. John
Marriott, John Arthur R.
TELLERS FOR THE NOES.—Mr,


Johnstone, J.
Wilson, Capt. A. Stanley (Hold'ness)
S. Robinson and Mr. Neal.


Macdonald, Rt. Hon. J. M. (Stirling)




Question put, and agreed to.

Orders of the Day — FINANCE BILL.

As amended, considered.

NEW CLAUSE.—(Further Italic in Respect of Children.)

(l) An individual who claims and proves in the manner prescribed in the Income Tax Acts—

(a) that his total income from all sources for the year of assessment, estimated in accordance with the provisions of those Acts, although exceeding one hundred and thirty pounds dots not exceed eight hundred pounds; and
(b) that he is unmarried and has living with him either his mother (being a widow or living apart from her husband), or some other female relative, maintained by him at his own expense, for the purpose of having the charge and care of any brother or sister of his, being a child in respect of whom relief is given under Section twelve of the Income Tax Act, 1918; and
(c) that no other individual is entitled to relief from Income Tax in respect of the same person under this Section, and that neither he nor any other individual is entitled to relief in respect of the same person under Section twelve or Section thirteen of the Income Tax Act, 1918, or if any other individual is entitled to any such relief that the other individual has relinquished his claim thereto;
shall be entitled in respect of his mother or such female relative to relief from tax upon fifty pounds.

(2) The relief conferred in respect of children by Section twelve of the Income Tax Act, shall be extended—

(a) so as to include relief in respect of any child over the age of sixteen and under the age of eighteen at the commencement of the year of assessment who is proved to be receiving full-time instruction at any university, college, school, or other educational establishment; and
(b) so as to provide relief in respect of one child from tax upon forty pounds and in respect of any child in excess of one from tax upon twenty-five pounds:
and that Section and Section thirteen of that Act and this Section shall have effect accordingly:

Provided that in cases of doubt as to the application of paragraph (a) of this Sub-section
it shall be competent for the Commissioners of Inland Revenue, on the request of the Income Tax Commissioners concerned, to consult the Board of Education.

In the application of this Sub-section to Scotland and Ireland, the Scottish Education Department and the Lord-Lieutnant, respectively, shall be substituted for the Board of Education.

(3) All claims under this Section shall be made and proved in accordance with Section twenty-eight or (in Ireland) Section two hundred and two of the Income Tax Act, 1918.—[Mr. Chamberlain.]

Brought up, and read the first time.

The CHANCELLOR Of the EXCHEQUER (Mr. Chamberlain): I beg to-move,
That the Clause be read a second time.
It is introduced to carry out promises I made in the Committee stage of the Bill to give relief in respect of children to the mother—to give the same relief as the father would have got; to raise the age of j relief for children in full-time attendance on education; and to raise the amount I allowed in respect of the first child in respect of whom any relief is given from £25 to £40. That is all that the Clause does, j and it is all in pursuance of my promises. The right hon. Gentleman opposite (Mr. Adamson) has handed me a manuscript Amendment asking mo to raise the age limit for school children from eighteen to twenty-one—the present age is sixteen. I was proposing to raise it to eighteen. He asks for it to be raised to twenty-one. That is a proposal which was pressed with great unanimity in the Committee stage by the Scottish Members. I have considered the matter carefully since, and, on the whole, I feel that the best course I can pursue is to take out the upward age limit altogether. After all, the object of this is to make our taxation system coincide with our education system, and we are anxious that these young people should pursue their education to the utmost point at which they can derive value from it. Under these circumstances, although the.
Scottish case would be met by the age of twenty-one, not all cases would be met by that. age, and I am prepared, when this Clause is under discussion, to strike out the words "and under the age of eighteen," which will leave it without a limit of age.

Mr. ADAMSON: I am very glad that the Chancellor of the Exchequer has seen his way to amend his new Clause in the manner he has indicated. I put down the manuscript Amendment in order to give effect to the general idea that was expressed in the Committee discussion, but the Amendment which the right hon. Gentleman has promised to give us is even better than mine, and I want to express my thanks to him for so handsomely meeting the point to which ho promised to give further consideration between the Committee stage and the Report stage. I have some other points to bring forward, and I have not yet had sufficient time to see whether the right hon. Gentleman's new proposals will give effect to them.

Mr. CHAMBERLAIN: I think that the best place to raise the other points referred to by the right hon. Gentleman will be on an Amendment which I shall be prepared to move to one of the Clauses later on, and which will embody what he has put down in the Amendment of which he speaks. I think that it would not properly come into this Clause.

Amendment made: In Subjection (2, a), leave out the words "and under the age of eighteen."—[Mr. Chamberlain]

Mr. A. WILLIAMS: May I raise the question whether there is any doubt as to the moaning of the word "child"? Will that mean the offspring of the parents, or a person under twenty -one? It is a matter of construction.

Mr. CHAMBERLAIN: We have cut out the age limit.

Mr. WILLIAMS: The words are: "any child over the age of sixteen." Would that cover a person over twenty-one? Would such a, person be regarded as a "child"?

Mr. CHAMBERLAIN: The Revenue authorities will so interpret it, and it is the obvious meaning of the Act.

Mr. ARNOLD: I beg to move, in Subsection (2, b), to leave out the word "one" ["relief in respect of one child"], and insert instead thereof the word "each."
It is not necessary for me to detain the House long, because the arguments in favour of giving relief to persons with small incomes have been advanced by myself and others in previous Debates. The Chancellor of the Exchequer has made certain concessions in this regard, and has increased the abatement in respect of the first child from £25 to £40. The effect of this Amendment will be to give an abatement of £40 not only for the first child, but for every other child below sixteen. Personally, I should prefer that he should go even further. There is a new Clause down on the Paper making the abatement for every child £50. But the right hon. Gentleman refused that last week, and so I am afraid there is no hope of his accepting it now. I hope, however, that ho may accept this more modest proposal. I submit that there is no adequate reason for making the abatement on the first child £40 and then making the abatement for the remaining children under sixteen at the reduced rate of £25. After all, the man with a, large family deserves well of the State, and these abatements for children ought really, I think, to be on an ascending scale, and not on a descending scale. The differentiation, regarded from a broad point of view, is in the wrong direction. The position comes to this: If two men have the same income, and one has a wife and one child while the other has a. wife and two or three children, obviously the second man has a bigger charge against his income than the first man; but although ho has a bigger charge ho really has a relatively smaller abatement. I submit that that is wrong. I do not think that the amount of revenue which would be lost to the State by the acceptance of this Amendment would be very great, and even if it were fairly considerable my opinion is that it would pay the State well, because it would be a real help to family life and child life.

Major ENTWISTLE: I beg to second the Amendment.

Mr. CHAMBERLAIN: I think the House will recognise that I have acted in a sympathetic spirit in considering the representations which have been made to me in this matter. I hope I shall not be expected to go further, at any rate at the present time. The concession of £40 in respect of the first child was a concession which I offered in the Committee stage as a final concession, and I expressed the hope that it would be treated as such.
One does express hopes which are often disappointed, but at the same time we do hope, with some confidence, that Amendments, though they may be raised in spite of our expressing those hopes, will not be persisted in in the same manner as if we had made no concession at all. I must-confess my inability to go further at the present time. I think I have made a very considerable advance, and I think there is justification for the distinction between the first and the other children. It is recognised in several other ways. It is recognised, for instance, in the separation allowances which we pay to soldiers, and it is habitually recognised by the Poor Law authorities in the payments which they make for the maintenance of boarded-out children or children in respect of whom they give relief. The ground for it is that as you add to the number in the household you do not proportionately increase the housekeeping expenses. That, of course, is true only within certain limits, but within reasonable limits it has a very real foundation, and it was on that ground that I invited the House to make this distinction, and to take it as the final settlement, at any rate for this year. Of course, in these matters there is no such thing as a final settlement, but for this year I suggest this differentiation of allowance between the first and other children.

Mr. HOGGE: Those of us who are supporting this further Amendment do not wish for a moment to let it be understood that we do not recognise what the Chancellor of the Exchequer has done in the way of concessions. We gratefully acknowledge what he has done right through the whole progress of the Bill. Bui we do not agree that the arguments and analogies which the Chancellor has used in regard to this particular matter have very great force. The Chancellor based his alteration on the analogy of the separation allowances paid to soldiers and sailors. I think he knows something about those allowances. One great reason why those allowances were never satisfactory—and they are not satisfactory even yet— was that in the lowest stages they did not even provide sufficient for the physical efficiency of the children concerned. The right hon. Gentleman talks about the descending scale of household expenses. As a matter of fact, under the separation allowances, it was worse for every mother with many children, because the more
children she had the less sum she got for each and the leas able she was to maintain her family. I can assure my right hon. Friend that that is so. If the child. was an infant, the separation allowance for the youngest was not sufficient to buy the amount of milk required to maintain that infant throughout the one week. That was the real tragedy about the separation allowances. On that ground, therefore, there is no reason why my right hon. Friend should refuse this. There is one very great ground, and it is really the best ground of all, why he should accept it, and that is that after the War, and after our experience of the War, this country not only wants children but wants healthy children. Under our present existing economic and social circumstances those children cannot be reared adequately, and cannot be given the benefit of those things which they ought to enjoy, if their parents' incomes go to any considerable extent in Income Tax. Really, what we are asking the Chancellor to do is to make it more possible to have a larger number of children, and of healthier children at that, than there are at the present time. I do not see for a single moment why he should not give way. I believe the only reason, after all, that does influence him in making a concession is the old-fashioned one— How much is it going to cost? I should have thought that in refusing to accept this Amendment ho might at any rate have informed us how much it would cost.

Mr. CHAMBERLAIN: A million.

Mr. HOGGE: The right hon. Gentleman says that this concession would only cost a million. If that is so, docs not he think it would be very well worth his while to contribute a million to the health of the community? We are setting up new Departments, including a Ministry of Health, which will cost the community much more than a million in stores and light and machinery and other things, which will not become effective for many years, whereas if he gives this million he is making a contribution at once. If he is correct, and I am sure he is, in the figure which he gives, why not round off the concessions he has been giving? I am not making this request in any way because we want to score any success over this, but I do honestly think that, if a million is all that is involved in the concession, the Chancellor of the Exchequer could easily round off what is. after all, a very fine contribution by giving way on this
further Amendment. He does not like to be incomplete, and if it is only a question of £1,000,000, why spoil his own concessions—why go down in the history of Chancellors of the Exchequer as the man who spoilt the ship for a pennyworth of paint, because that is what it really amounts to? You are spoiling one of the best contributions over made in response to pressure from the House by not going all the way. I very respectfully ask Him, in view of what I have said, and if not in view of what I have said in view of what he has said himself, to take his courage in both hands and say, "Very well, we will make this concession absolutely complete in the same year in which we made the first concession."

Dr. MURRAY: In supporting the Amendment proposed by my hon. Friend the Member for Penistone, I should like to join in thanking the Chancellor of the Exchequer for the valuable concession he has made in allowing an abatement of £40 in respect of the first member of the family. I believe that it will be a concession of great value to some of the more poorly-paid professional and other people of Scotland. The rise in prices tells very heavily upon a large number of families who are the least vocal people in the country and are not so ready to complain, and this rise in prices and the difficulty of living in these times will make it a very serious question for parents to say whether their children, for instance, are to have a holiday this year. Even in that one respect this is a matter which deserves a. little more generous consideration on the part of the Chancellor of the Exchequer. The Chancellor of the Exchequer has mentioned that it will cost £1,000,000, but I think it will be £1,000,000 well lost. Of course, I can understand the right hon. Gentleman saying that, if we go on like this, the whole Budget might go to vanishing point; but there is no danger of that. Seeing that the cost is only £1,000,000, and in view of the circumstances in which the lower middle classes find themselves at the present time, and in the interests of the health of the rising generation, I think that this is a concession of such value that it would, in the long run, repay the country.
Another matter that would be a very serious burden in families of the kind to which I have referred is that of the education of children. I admit the value of the concession already made, but the same
problem will arise in many families with regard to whether they can send their children to a certain school, college or university. Throughout Scotland people of very small incomes send their children to various training colleges and to the universities—they are a somewhat-different class of people from those who send their children to similar institutions in England. The problem for them in years to come is whether they can send their children to these colleges and give them the education which before the War they intended for them. With this rise in prices it is very difficult for many parents, who otherwise would have sent their children to a college or university, to decide to send them there now, so the Chancellor of the Exchequer might indulge his generosity a little further and grant this concession.

Mr. JOHNSTONE: I was sorry to hear from some parts of the House expressions to the effect that this would cost "only £1,000,000." We will never have economy in this House if we look upon £1,000,000 as such a small thing, and one danger which I see in my hon. Friend's pressing the Chancellor is this, he has given a valuable concession. I was one of the Scottish Members who wished that the age limit should be raised to twenty-one, so as to allow children to attend the university. The Chancellor of the Exchequer has met us very well in that respect. He has also met us in regard to the £40 for the first child. I do not think it wise to press him further. It will mean this, that if undue advantage is taken of these concessions, in future you will find the Chancellor presenting a heart of stone to all appeals to his sympathy, and if one concession is to be used as the jumping-off ground for another, there is no end to them. Do not let us run away with the idea that, because there is only £1,000,000 involved in this, it is not a matter of consequence. We are entering upon a period of carelessness with regard to expenditure, and one of the most alarming symptoms in this House is to treat £1,000,000 as not of much account.

Mr. CHAMBERLAIN: Perhaps the hon. Gentleman opposite was labouring under a misapprehension. The "first child" does not mean only the eldest child, but it means the first child in respect of an allowance in any given year.

Dr. MURRAY: I understand that.

Lieut.-Commander KEN WORTHY: There was one very powerful argument in the speech of the hon. Member for East Edinburgh which appealed to me. This concession will make the extra money available for the care b the younger children, so that the amount will be saved over and over again in the health of the community. Otherwise, more money will

have to be spent on the expenses of Ministers of Health, sanatoria, Poor Law hospitals, and all the rest of it. The best asset of the country is its people, and the improvement of their health is the finest investment you can make.

Question put, "That the word 'one' stand part of the Clause." The House divided: Ayes, 230; Noes, 66.

Division No. 78.]
AYES.
[4.38 p.m.


Agg-Gardner, Sir James Tynte
Elliot, Capt. W. E. (Lanark)
Maitland, Sir A. D. Steel-


Amsworth, Captain C.
Eyres-Monsell, Commander
Mallaby-Deeley, Harry


Archdale, Edward M.
Falle, Major Sir Bertram Godfray
Malone, Col. C. L. (Leyton, E.)


Astor, Major Hon. Waldorf
Farquharson, Major A. C.
Marriott, John Arthur R.


Atkey, A. R.
Fell, Sir Arthur
Meysey-Thompson, Lt.-Col. E. C.


Bagrey, Captain E. A.
FitzRoy, Capt Hon. Edward A.
Middlebrook, Sir William


Baird, John Lawrence
Flannery, Sir J. Fortescue
Mitchell, William Lane-


Baldwin, Stanley
Forestier-Walker, L.
Molson, Major John Elsdale


Barnes, Major H. (Newcastle, E.)
Fraser, Major Sir Keith
Mond, Rt. Hon. Sir Alfred Moritz


Barnston, Major Harry
Gange, E. S.
Moreing, Captain Algernon H.


Beck, Arthur Cecil
Ganzoni, Captain F. C.
Morison, T. B. (Inverness)


Bell, Lieut.-Col. W. C. H. (Devizes)
Gardiner, J. (Perth)
Morrison, H. (Salisbury)


Bellairs, Com. Carlyon W.
Gibbs, Colonel George Abraham
Morrison-Bell, Major A. C.


Benn, Sir Arthur S. (Plymouth)
Gilmour, Lt.-Col. John
Mount, William Arthur


Bonn, Com. Ian Hamilton (Greenwich)
Glyn, Major R.
Murray, Lt.-Col. Hon. A. C. (Aberdeen)


Bennett, T. J.
Gould, J. C.
Murray, Major C. D. (Edinburgh, S.)


Bentinck, Lt.-Col. Lord H. Cavendish-
Grant, James Augustus
Murray, Hon. G. (St. Rollox)


Betterton, H. B.
Gray, Major E.
Neal, Arthur


Bigland, Alfred
Green, J. F. (Leicester)
Nelson, R. F. W. R.


Bird, Alfred
Greenwood, Col. Sir Hamar
Newman, Major J. (Finchley, Mddx.)


Blair, Major Reginald
Greig, Colonel James William
Nicholl, Com. Sir Edward


Blake, Sir Francis Douglas
Gretton, Colonel John
Nicholson, R. (Doncaster)


Berwick, Major G. O.
Griggs, Sir Peter
Nicholson, W. (Petersfield)


Bowles, Col. H. F.
Gritten, W. G. Howard
Nield, Sir Herbert


Bowyer, Captain G. W. E.
Guinness, Lt.-Col. Hon. W. E. (B. St. E.)
Ormsby-Gore, Hon. William


Boyd-Carpenter, Major A.
Hacking, Captain D. H.
Palmer, Brig.-Gen. G. (Westbury)


Brassey, H. L. C.
Hailwood, A.
Parker, James


Bresse, Major C. E.
Hallas, E.
Pease, Rt. Hon. Herbert Pike


Brittain, Sir Harry E.
Hambro, Angus Valdemar
Perkins, Walter Frank


Brown, Captain D. C. (Hexham)
Harmsworth, Cecil B. (Luton, Beds.)
Pinkham, Lieut.-Col. Charles


Bruton, Sir J.
Harris, Sir H. P. (Paddington, S.)
Pratt, John William


Buchanan, Lieut.-Colonel A. L. H.
Henderson, Major V. L.
Pretyman, Rt. Hon. Ernest G.


Buckley, Lt.-Col. A.
Hennessy, Major G.
Purchase, H. G.


Bull, Right Hon. Sir William James
Henry, Denis S. (Londonderry, S.)
Raeburn, Sir William


Burgoyne, Lt.-Col. Alan Hughes
Herbert, Col. Hon. A. (Yeovil)
Randles, Sir John Scurrah


Burn, Colonel C. R. (Torquay)
Higham, C. F. (Islington, S.)
Ratcliffe, Henry Butler


Butcher, Sir J. G.
Hilder, Lieut.-Colonel F.
Remer, J. B.


Campbell, J. G. D.
Hills, Major J. W. (Durham)
Remnant, Col. Sir J. Farquharson


Carew, Charles R. S. (Tiverton)
Hinds, John
Renwick, G.


Carr, W. T.
Hoare, Lt.-Col. Sir Samuel J. G.
Roberts, Rt. Hon. George H. (Norwich)


Cecil, Rt. Hon. Lord Hugh (Oxford U.)
Hohler, Gerald Fitzroy
Roberts, Sir s. (Sheffield, Ecclesall)


Chamberlain, Rt. Hon. J. A. (Birm., W.)
Hope, Lt.-Col. Sir J. (Mldlothian)
Robinson, S. (Brecon and Radnor)


Chamberlain, N. (Birm., Ladywood)
Hopkins, J. W. W.
Robinson, T. (Stretford, Lancs.)


Cheyne, Sir William Watson
Horne, Sir Robert (Hillhead)
Rodger, A. K.


Child, Brig.-General Sir Hill
Howard, Major S. G.
Roundell, Lieut.-Colonel R. F.


Clay, Captain H. H. Spender
Hughes, Spencer Leigh
Rowlands, James


Clough, R.
Jodrell, N. P.
Royds, Lt.-Col. Edmund


Coats, Sir Stuart
Johnstone, J.
Samuel, Rt. Hon. Sir H. (Norwood)


Cockerill, Brigadier-General G. K.
Jones, J. Towyn (Carmarthen)
Seager, Sir William


Colvin, Brigadier-General R. B.
Joynson-Hicks, William
Seely, Maj.-Gen. Rt. Hon. John


Conway, Sir W. Martin
Kelly, Major Fred (Rotherham)
Shaw, Hon. A. (Kilmarnock)


Coote, William (Tyrone, S.)
Kidd. James
Shaw, Captain W. T. (Forfar)


Cory, Sir James Herbert (Cardiff
Knight, Capt. E. A.
Sprot, Colonel Sir Alexander


Courthope, Major George Loyd
Law, A. J. (Rochdale)
Stanier, Captain Sir Beville


Cowan, D. M. (Scottish University)
Law, Right Hon. A. Bonar (Glasgow)
Stanley, Colonel Hon. G. F. (Preston)


Cowan, Sir H. (Aberdeen and Kinc.)
Lewis, Rt. Hon. J. H. (Univ. Wales)
Stanton, Charles Butt


Craik, Right Hon, Sir Henry
Lewis, T. A. (Pontypridd, Glam.)
Stephenson, Colonel H. K.


Curzon, Commander Viscount
Lister, Sir R. Ashton
Stevens, Marshall


Dalziel, Sir Davison (Brixton)
Lloyd, George Butler
Stewart, Gershom


Davidson, Major-Gen. Sir John H,
Locker-Lampson, G. (Wood Green)
Sturrock, J. Leng-


Davies, Sir D. S. (Denbigh)
Locker-Lampson, Com. O. (Hunt'don)
Surtees, Brig.-General H. C.


Davies, T. (Cirencester)
Lorden, John William
Sutherland, Sir William


Davison, Sir W. H. (Kensington)
Loseby, Captain C. E.
Sykes, Col. Sir A. J. (Knutslord)


Dewhurst, Lieut.-Com. H.
Lowther, Col. Claude (Lancs., Lons.)
Talbot, G. A. (Hemel Hempstead)


Dockrell, Sir M.
M'Donald, Dr. E. F. p. (Wallasey)
Taylor, J. (Dumbarton)


Doyle, N. Grattan
M'Laren, R. (Lanark, N.)
Terrell, G. (Chippenham, Wilts)


Duncannon, Viscount
McMicking, Major Gilbert
Thomson, F. C. (Aberdeen, S.)


Du Pre, Colonel W. B.
Macnamara, Rt. Hon. Dr. T. J.
Tickler, Thomas George


Townley, Maximilan G.
Whitla, Sir William
Wilson, Col. M. (Richmond, Yorks.)


Tryon, Major George Clement
Whittaker, Rt. Hon. Sir Thomas P.
Wood, Major Hon. E. (Ripon)


Waddington, R.
Wigan, Brig.-Gen. John Tyson
Wood, Sir H. K. (Woolwich, W.)


Walton, J. (York, Don Valley)
Williams, Lieut.-Com. C. (Tavistock)
Woolcock, W. J. U.


Ward-Jackson, Major C.
Williams, Lt.-Col. Sir R. (Banbury)
Yate, Colonel Charles Edward


Ward, Colonel L. (Kingston-upon-Hull)
Williams, Col. Sir R. (Dorset, W.)
Younger, Sir George


Wardle, George J,
Willoughby, Lt.-Col. Hon. Claud



Warren, Sir Alfred H.
Wills, Lt.-Col. Sir Gilbert Alan H.
TELLERS FOR THE AYES.—Capt.


Watson, Captain John Bertrand
Wilson, Capt. A. Stanley (Hold'ness)
Guest and Colonel Sanders.


Wheler, Colonel Granville C. H.
Wilson, Lt.-Col. Sir M. (Bethnal Gn.)



NOES.


Adamson, Rt. Hon. William
Hancock, John George
Royce, William Stapleton


Barton, Sir William (Oldham)
Hayday, A.
Short, A. (Wednesbury)


Benn, Capt. W. (Leith)
Hayward, Major Evan
Sitch, C. H.


Brace, Rt. Hon. William
Hirst, G. H.
Smith, Capt. A. (Nelson and Colne)


Briant, F.
Hodye, Rt. Hon. John
Spencer, George A.


Brown, J. (Ayr and Bute)
Hogge, J. M.
Swan, J. E. C.


Cape, Tom
Holmes, J. S.
Thomas, Brig.-Gen. Sir O. (Anglesey)


Carter, W. (Mansfield)
Kenworthy, Lieut.-Commander
Thomson, T. (Middlesbrough, W.)


Casey, T. W.
Kenyon, Barnet
Thorne, G. R. (Wolverhampton, E)


Clynes, Right Hon. John R.
Lambert, Rt. Hon. George
Tootill, Robert


Crooks, Rt. Hon. William
Maclean, Neil (Glasgow, Govan)
Walsh, S. (Ince, Lancs.)


Davies, Alfred Thomas (Lincoln)
Morris, Richard
Waterson, A. E.


Davison, J. E. (Smethwick)
Murray, Dr. D. (Western Isles)
Wignall, James


Edwards, c. (Bedwellty)
O'Grady, James
Williams, A. (Conset, Durham)


Edwards, Major J. (Aberavon)
Onions, Alfred
Williams, J. (Gower, Glam.)


Edwards, J. H. (Glam., Neath)
Parkinson, John Allen (Wigan)
Wilson, Rt. Hon. J. W. (Stourbridge)


Galbraith, Samuel
Parry, Major Thomas Henry
Wilson, W. T. (Westhoughton)


Glanville, Harold James
Raffan, Peter Wilson
Wood, Major Mackenzie (Aberdeen, C.)


Graham, D. M. (Hamilton)
Rendall, Athehtan
Young, Robert (Newton, Lancs.)


Graham, W. (Edinburgh)
Richards, Rt. Hon. Thomas
Young, William (Perth and Kinross)


Griffiths, T. (Pontypool)
Richardson, R. (Houghton)



Grundy, T. W.
Roberts, F. O. (W. Bromwich)
TELLERS FOR THE NOES.—Mr.


Guest, J. (Hemsworth, York)
Rose, Frank H.
Arnold and Major Entwistle.


Question put, and agreed to.

Proposed Clause, as amended, added to the Bill.

NEW CLAUSE.—(Further Provision as to Allowances for Repairs.)

The houses to which Rule 8 of No. V. in Schedule A (which confers relief in certain cases in respect of the cost of maintenance, repairs, insurance, and management of houses) applies, shall be any house the annual value of which, as adopted under Schedule A, does not exceed—

(a) where the house is situate in the Metropolitan police District, including the City of London, seventy pounds;
(b) where the house is situate in Scotland, sixty pounds; and
(c) whore the house is situate elsewhere, fifty-two pounds;
and Sub-section (3) of the said Rule 8 shall be amended accordingly:

Provided that no repayment of tax shall be made under the said Rule 8 in respect of the cost of maintenance, repairs, insurance, or management if or to such extent as the said cost has been otherwise allowed as a deduction in computing income for the purposes of Income Tax.—[Mr. Chamberlain]

Brought up, and read the first time.

Mr. CHAMBERLAIN: I bog to move, "That the Clause be read a second time." This Clause also is one which carries out a promise which I made in Committee.

Clause accordingly read a second time, and added to the Bill.

NEW CLAUSE.—(Relief in Respect of Earned Income.)

The following Sub-section shall be substituted for Sub-section (3) of Section fourteen of the Income Tax Act, 1918, which deals with the expression "earned income":

(3) For the purposes of this Section the expression "earned income" means—
(a) any income arising in respect of any remuneration from any office or employment of profit held by the individual, or in respect of any pension, superannuation, or other allowance, deferred pay, or compensation for loss of office, given in respect of the past services of the individual or of the husband or parent of the individual in any office or employment of profit, or given to the individual in respect of the past services of any deceased person, whether the individual or husband or parent of the individual shall have contributed to such pension, superannuation allowance, or deferred pay or not; and
(b)any income from any property which is attached to or forms part of the emoluments of any office or employment of profit held by the individual; and
(c)any income which is charged under Schedule B or Schedule D, or the rules applicable to Schedule D, and income accruing to an individual from the ownership of stocks, shares, securities, or property, the income from which he receives by reason of the carrying on of his business or profession, and from which Income Tax has been deducted before receipt of the income by him or is assessed under Schedules A and i), and he shall, on application, be repaid the difference between the rate of tax deducted or paid and the
1427
rate which he should be assessed according to the amount of his total income from all sources.—[Mr. G. Locker-Lampson.]

Brought up, and read the first time.

Mr. LOCKER-LAMPSON: I beg to move.
That the Clause be read a second time.
It is not so formidable as it looks on the Paper. Down to the end of paragraph (b) it is the law as it at present stands. My Amendment really consists only of paragraph (c), and it had to be framed in this form in order to bring it within the rules of order. The Amendment is designed to relax the present very strict interpretation of what is known as earned income. Under the present Income Tax law, among other things, earned income is considered to mean any income chargeable under Schedule B or D, and as immediately derived by the individual from his calling, profession, trade, or vocation. I should like the House to note that word "immediately," because it really lies at the centre of the Amendment. I submit that this definition and the way it is construed by the Income Tax authorities is not nearly wide enough. If I may, I will give two examples. Take the case of a stock-jobber. He has to hold shares, and very large blocks of shares, for the purpose of his business. Without holding them he could not carry on this business at all. If he holds shares in trading concerns only, but holds them merely for the purpose of business, the full rate of 6s. in the £is deducted. If, on the other hand, he holds Government or Colonial securities, those come under Schedule C, to which the earned rate of income does not apply at all. So that he is hit in both cases. He cannot make a reduction on his shares in trading concerns, although it is his proper business to hold these stocks; he cannot make the reduction because they are not considered to be "immediately" held for the purpose of his business. T cannot see why that should be alleged.
With regard to the Colonial or Government securities which lie may hold, they are entirely outside the scope of what is known as earned income. I think that is very unfair. Take the case of a builder who builds houses for the purpose of selling them. It is quite conceivable that the builder is not able to sell them for some time, and that the only thing he can do to recoup himself is to let them, pending
sale. Naturally, he lets them in connection with his business as a builder. In the case of sales, supposing he sold them straightaway he is assessed under Schedule D and gets all the advantage of the rate under that schedule. But suppose he lets his houses before selling them, in regard to the income from the letting of the houses he is assessed under Schedule A at the full rate of 6s. in the £ he is taxed at the full unearned rate. That again does not scorn to be at all fair. My point is that all increments which accrue to a trader or business man in connection with the business he is carrying on, which can be shown to be absolutely necessary for the business, ought to be dealt with at the earned rate. My Amendment is designed to bring that about.

Mr. JOYNSON-HICKS: I beg to second the Motion.

Mr. CHAMBERLAIN: The point has been put clearly and succinctly by the lion. Member, but I am not sure that he himself realises how destructive it would be of the present distinction between earned and unearned income. The basis of the distinction is that income maybe of two kinds. A portion of it may be dependent on the personal activities of the receiver, a portion may be the result of the past activities of himself or anybody else, a return upon capital accumulated by him or by them which continues even though he himself no longer makes any personal exertion in the securing of it. In the first case, the income would cease if the man retired from business, and, of course, it would cease if he died. In the second case, even though he retired or died the income would still continue. That is the broad distinction between what is described as earned and unearned income. The proposal comes to this: that where a person. in pursuance of a business and for the purpose of a business, derives income from invested capital and not from personal exertion, income of a kind which will go on whether he continues his business or not, that income should be treated as if it were the result of his personal activity and put into the category of earned income. It would be impossible to maintain the distinction between earned and unearned income if T accepted the Amendment. It would give to those who both hold investments and derive income from invested capital and from business
exertion an opportunity of being assessed on a more favourable scale in respect of a considerable portion of their unearned income than any other taxpayer not so situated. It would differentiate between unearned income in the hands of one person and that in the hands of another. I am sorry to say I cannot accept the Amendment, which would be fatal to the whole basis of the distinction between earned and unearned income.

LORD HUGH CECIL: I believe my right Friend is right in his argument, but I look upon this as judgment overtaking him for using a wrong word. "Earned" is a wrong word.

Mr. CHAMBERLAIN: I am responsible neither for the definition nor for the language in which it is framed.

LORD H. CECIL: I am regarding you as an incorporation of souls carrying on the traditions of the Treasury. It would be very much clearer if we could have a distinction where the income is income that lasts and may be handed on to others and where it is an income that dies or ceases with the exertion of the person who receives it. In the case of a man who makes his money and has also to save out of his money enough for those dependent on him, it is right that he should be taxed more lightly. If he has money invested he can leave it and he need not save out of his income to that degree. The proper word to be used is not "earned." If the language were more explicit my right hon. Friend would not be exposed to Amendments of this kind.

MR. LOCKER-LAMPSON: I do not propose to press my Motion, but I do not think the Chancellor of the Exchequer quite realises what is my intention. If a man gave up his business he could not claim to be assessed at the earned rate after giving up his business. It is only while he gets his income during the carrying on of his business that I wish to give him the advantage of the earned rate.

Motion and Clause, by leave, withdrawn.

MR. JOYNSON-HICKS: There are three Clauses standing on the Paper in my name, and I should like to move the second of them. The third, I understand, is technically out of order.

MR. SPEAKER: I am rather doubtful about the Clause referred to. It is very indeterminate, and of a rather hypotheti-
cal character. I think that the hon. Member had better state his case on the first of the Clauses.

NEW CLAUSE.—(Motor Spirit. Duties.)

All duties of Customs on motor spirit imported into Great Britain or Ireland are hereby repealed.—[Mr. Joynson-Hicks.]

Brought up, and read the first time.

Mr. JOYNSON-HICKS: I beg to move.
That the Clause be read a second time.
The case is simply this. The House will remember that in 1909 the Road Board was established and certain Petrol Duties were imposed on motorists. We have heard a good deal recently about the user of roads. These taxes were imposed by the present Prime Minister when Chancellor of the Exchequer, and these are the words the right hon. Gentleman used:
The tax has been imposed purely for the benefit of the roads of the country, and it is no part of the general scheme of the Government for raising revenue.
I would like hon. Members who occasionally cry out against us motorists to note this, and I wish the hon. Member for Silvertown (Mr. J. Jones) were present. The right hon. Gentleman went on:
The brunt of the expense at the beginning must be borne by motorists, and to do them justice they are willing and even anxious to subscribe handsomely towards such purposes, so long as a guarantee is given, in the method of control of the expenditure, that the funds so raised will not merely be devoted exclusively to the improvement of roads, but that they will be well and wisely spent.
5.0 p.m.
Relying upon those words motorists quite freely and willingly agreed to the imposition of this particular taxation which was not imposed on any other form of conveyance, and in order that the funds so raised should be transferred to the Road Board and used for the improvement of roads. Mr. McKenna in 1915 asked that this tax should be diverted from its original purpose and put into the general funds because, and quite rightly, he said we could not afford to waste any money at all and needed every penny for the purposes of the War. Motorists willingly acceded to the suggestion and paid the tax in 1916–17–18. The War is over and I move in order to obtain a declaration from the right hon. Gentleman that he agrees with the statement of the Prime Minister in 1909 and Mr. McKenna in 1915. The Chancellor of the Exchequer is giving this year far more than the proceeds of this tax to the. roads, namely, a sum of £10,000,000
out of the general taxation, because it is realised that the manner in which the roads were treated, and necessarily, during the War by the Government and other vehicles has involved very large expenditure in the repair of those roads. Road users and authorities are grateful for that Grant. On the other hand, they want the right hon. Gentleman, as soon as he can, and I do not press it this year as the War is not fully over, to restore this tax to its original purpose so that the road authorities may have a certain sum which they can depend upon for a period of at least five years, so that they may lay their plans for the improvement of roads, which as in the case of the building of a main road may take at least five years. I would ask my right hon. Friend, if he can, to give us an assurance that he will be able next year to restore this money to its original purpose, and thereby enable the Minister of Ways and Communications, though I would prefer to see the old Road Board, and the authorities concerned to cut their coat not according to the cloth at the moment, but the cloth spread over for five years.

Mr. LOCKER-LAMPSON: I beg to second the Motion.

Mr. CHAMBERLAIN: My hon. Friend has stated the case so fairly that I have very little to add. I recognise that the original Motor Spirit Duty was put on in order to find a revenue for the improvement and upkeep of the roads. I have certainly no intention, so far as I am concerned, of diverting that tax permanently to any other purpose whatever. I think that that tax, or its equivalent, should go to the upkeep and development of roads. My hon. Friend explained the circumstances under which the tax was diverted during the War. The old tax would have been restored for its purpose this year if it was at all adequate to the needs of the position; but obviously the situation which had arisen was one which required more heroic remedies, and when we were providing this payment it was not worth while to restore this tax and then diminish the £10,000,000 by an equivalent amount. I said that the original tax, or its equivalent, should be restored to the purpose for which it was originally imposed. I did no exclude from consideration the question of giving a larger sum than the original tax would produce on the present use, but I am not now considering that point. All I say is that the obligation is in relation to
the original tax and not to the increased tax which was superimposed during the War. With regard to the future, as the House knows, I indicated that this tax is a, costly one to collect, and a very inconvenient one, because it depends on the use of the article which is taxed. I do not think a tax of that kind can ever be a satisfactory fiscal weapon. I have privately invited representatives of the industry to suggest an alternative, and I now take the opportunity of repeating that invitation publicly. Assuming that they are to be taxed to the extent to which they are now taxed, is there another way which will be more suitable from the revenue point of view and from theirs, because our interests are really the same, and I would like to know what they would suggest? I have no intention of going back on the original bargain or understanding between the present Prime Minister when he was Chancellor of the Exchequer and the motorists who cooperated with much public spirit with him.

Mr. JOYNSON-HICKS: I am very much obliged to the right hon. Gentleman for the way he has met me, and I am very glad to withdraw the Clause. There is only one thing I would say, and that is, in asking me to suggest another form of hari-kari for the unfortunate motorists, I would rather he submitted a tax and leave me to criticise it, rather than that I should submit one and leave him to criticise it. However, we are considering what proposals, in fairness to the Exchequer and ourselves, we can put before the Chancellor.

Motion and Clause, by leave, withdrawn.

Mr. CHAMBERLAIN: My right hon. Friend (Mr. Adamson) has given notice to move a new Clause as to an allowance. I am ready to accept the principle of this Clause, but this is not the most convenient place. That would, I think, be after Clause 24. I am not satisfied that the words of the Clause are quite suitable, but perhaps the right hon. Gentleman will be willing to take the matter on Clause 24.

Mr. ADAMSON: I am quite willing to accept the suggestion of the right hon. Gentleman.

NEW CLAUSE—(Assessment of Income of Wage Earners.)

Notwithstanding anything in the Finance (No. 2) Act, 1915, or the Income Tax Act, 1918, weekly wage earners as defined in these Acts shall be assessed upon their wages for the whole
year, and the tax shall be payable by four equal quarterly instalments in the year.—[Mr. Adomson.]

Brought up, and read the first time.

Mr. ADAMSON: I beg to move
That the Clause be read a second time.
When we were discussing the Bill in Committee I raised this particular point, and the Chancellor said he would consider the matter. We have had a consultation, and I think probably by administrative Order such steps will be taken as will give effect to the object we have in view.

Mr. CHAMBERLAIN: The contemplated arrangement is that where it is found that in the first three-quarters of the year the tax has been paid, and owing to failure of earning in the last quarter no tax is due because the income has fallen below the taxable limit, then the Inland Revenue authorities will commence repayment on their own account, without waiting for a claim from the person overtaxed.

Motion and Clause, by leave, withdrawn.

NEWCLASUE.—(Exemption from Income Tax of Imperial Overseas Produce.)

A non-resident British-Indian, Dominion, or Colonial firm or company shall not be chargeable to Income Tax in respect of any profits or gains arising from the sale wholesale in the United Kingdom of the produce of British-India or of any British Dominion or Colony. —[Mr. A. shaw.]

Brought up, and read the first time.

Mr. A. SHAW: I beg to move
That the Clause be read a second time.
It is a Clause which involves no sacrifice of present revenue; but the point is an important one. It is aimed as a new attempt on the part of certain assessments in London and elsewhere to impose taxation upon the Colonies, and when the matter is explained I think the House will realise that it is an extremely grave departure in policy. All that those who favour this new Clause wish to do is to safeguard the position of our Imperial trade as it stands to-day. There are three ways in which a firm in the Dominions can dispose of its produce in this country. It may sell it direct to a wholesaler here; if it does that, it is not charged with Income Tax on the profit which it makes. It may sell it by doing a hand-to-mouth and irregular course of trade on our market through commission agents or brokers, and if it does that it is not charged with Income Tax on the profit which it makes. The
third method, and the method which I venture to suggest is the best for this country, is that the firm in the Colonies should conduct a regular course of business with this market by employing one or other of those substantial and long-established agency houses in the City of London or elsewhere in the United Kingdom. Suppose it appoints one of these houses as its regular agent. From that moment it is penalised. Once it establishes a regular channel for its produce in this country, that channel is going to be blocked up. At present that is not the case, but since May of this year attempts are being made to block up these regular channels. There can be nothing more important, I venture to think, at the present time than to keep British trade flowing within its regularly established channels. Take the position of a Canadian company, for example, which. wishes to set up a regular course of business here. In all probability it appoints some great firm here to act as its agent. I know of cases where such firms have been appointed half a century ago to act on behalf of firms in India with native shareholders or of firms in Canada with purely Canadian shareholders, and that has been the normal course of business up to the present. But now, unfortunately, in this year, for the first time, there is being directed against purely Colonial businesses an entirely new form of attack, if they have been rash enough to set up a regular course of trade here through regularly appointed agents. I may say that I am not in any way interested personally in this matter, and I have not one single penny of interest one way or the other, but the matter was brought to my notice in the form of a letter received by a very eminent firm in the City of London on the 30th May, 1919. This was a letter from a surveyor of taxes to this eminent firm, who have acted, I believe, for a period of years for a certain company which is domiciled in India and which sends through this firm its Indian tea to be disposed of on the London market. This is the letter, dated 30th May, 1019:
Gentlemen, it would appear that by virtue of the Articles of Association, you hold the position of London agents for this company, for the purpose of the sale of tea in London, etc. It would, therefore, appear that the profits derived in this country from such sales are assessable in your name. I shall be glad, therefore, if you will let me have particulars of the amounts of the sales effected by you from the 18th January, 1918, to the 5th April. 1918. and from that date to the 5th April, 1919, or for any other period for which particulars are ascertainable by you,
and also particulars as to the cost of production, etc., of this tea, in connection with which I shall be glad to have the accounts of the company.
That is not an attempt to tax the agent, who is already taxed to the full on any profit which he makes, but it is an attempt for the first time in our history to get past the agent and to place a new form of double income Tax upon a Colonial and Imperial firm which conducts its business overseas. It is done, I understand, under cover of a piece of hasty war-time legislation, which I venture to suggest to the Chancellor of the Exchequer would never have been passed by him or if we had not been in a panic. Section 31, Sub-section (2), of the Finance (No. 2) Act, 1915, says:
A non-resident person shall be chargeable in respect of any profits or gains arising, whether directly or indirectly, through or from any branch, factorship, agency, receivership, or management, and shall be so chargeable under Section 41 of the Income Tax Act, 1842, as amended by this Section, in the name of the branch, factor, agent, receiver, or manager.
I know of several firms who for half a century have been sending their Indian tea through regularly appointed agents, and from now onward, if this is pressed by the minions of the Chancellor of the Exchequer, they will have, in addition to the taxation in India, an additional 6s. in the £for their native shareholders to pay because they send their produce here through a regular channel. The same Section, Section 31, Sub-section (6), states this, which I think will amaze the House of Commons:
Nothing in Section 41 of the Income Tax Act, 1842 (as amended by any subsequent enactment or by this Section), shall render a non-resident person chargeable in the name of a broker or general commission agent, or in the name of an agent, not being an authorised person carrying on the non-resident's regular agency or a person chargeable as if he were an agent in pursuance of this Section, in respect of profits or gains arising from sales or transactions carried out through such a broker or agent.
The position is therefore this. I am a Canadian firm, I send my produce, as I have done for many years past, through a regular agent, and I am penalised 6s. in the £. I am the same Colonial firm, I send my produce dissipated over the market through commission agents or brokers, and I get off scot-free. That is a position so absurd and anomalous that, although I have spoken to many hon. Members about it, they would hardly believe me until they had seen it in the Statute.
This new attack on Colonial businesses creates a position or some gravity at the present time. It sets up two new and most undesirable tendencies. Let me briefly take the case of tea. The native tea companies and firms in India, rather than submit to this, will be tempted to send their tea to other markets, for instance, Amsterdam, which, as the House knows, is the great competitor with London for the leadership of this class of business in the world, and we are really-giving Amsterdam a great impetus by this, because these Indian firms will be able to send their produce to that market without the inconveniences which are so rapidly becoming associated with the regular course of business in this country. I would remind the Chancellor of the Exchequer that that applies not only to the produce which we keep in this country, but it is a distinct blow to that great entrepot trade in tea in which, as in many other Colonial articles, we at present hold the leadership of the world. If this market is put under penalties which apply to no other market in the world, we can hardly hope it will remain the great central entrepot of our Imperial trade. That is the first point, that it tends to force Colonial produce into other markets, and the second point is that if that produce continues to be sent here, it must be sent here through irregular channels. It is impossible to emphasise too much the importance at this time of making the channels of our inter-Imperial trade secure and clearly marked. We need this inter-Imperial trade now more than ever we have done before in the history of the British Empire, and I must confess that, although I know the sincerity of the. Chancellor of the Exchequer on matters of preference, preference is obliterated and far more than obliterated by the course of action which is being taken by the assessors with his apparent approval and consent. These are some of the arguments in favour of this Clause. I would remind the House that it does not involve the sacrifice of a penny of existing revenue, that it seeks merely to maintain the same position as is in force at this moment in regard to our imperial trade, and that it seeks to prevent the regular channels of that trade being blocked up by this entirely new and entirely gratuitous effort on the part of the assessors, who are naturally parochially minded.
The Chancellor of the. Exchequer's answer in Committee was, if I may say so with
respect, profoundly disappointing to all concerned, and I propose briefly to run over the three arguments against this Clause which he then produced. The first of his arguments, and I am going to quote from the OFFICIAL REPORT, was:
It has been a principle of Income Tax ever since its establishment that the liability for it attaches only 'to the profits or gains accruing to any person whether a British subject or non-resident in the United Kingdom from any property whatever in the United Kingdom or from any trade, profession, employment or vocation exercised in the United Kingdom' "—
All these words are perfectly irrelevant, because there is no profession exercised in the United Kingdom by the firm in the Colonies which sends its produce here. The profession is exercised by the agent, who makes his profit and whose profit is taxed. The Chancellor of the Exchequer went on to say:
As time went on people found they could so adjust their business that the profits was not made here, and that they could evade the basic principle of theAct."—[OFFICIAL REPORT, 16th July. 1919, col. 546.]
I venture to say that the Chancellor of the Exchequer must admit that that dangerous introduction of the word "evasion" is singularly unjustified. In what way is a Colonial firm which sends its produce here guilty of evasion, when it sends it through open, regular channels, when it sends it here rather than across the border of the United States, and when it chooses to receive in return a cargo of British machinery instead of American machinery? In what way is it guilty of evasion'? I venture to tell the Chancellor of the Exchequer that I know that the effect of what is being done just now will be evasion on a colossal scale, and evasion dictated by the desire of Colonial firms to maintain their existence. Australia is faced with an Income Tax of something like 10s. in the £, and another 6s. on their produce here will make it 16s. in the £, and that will mean that the attractions of this market for our Dominions are going. Australia is only one instance and there are other places, and rather than submit to this entirely now form of double Income Tax which is being imposed within the Empire, even while the Commission is sitting, they will find methods, not of evasion perhaps, but of avoidance, one of the most apparent of which is the avoidance of this market altogether. We come to the second of ray right hon. Friend's arguments. Perhaps it was the late hour
of the night, but I do think my right hon. Friend did not treat this matter with his usual fair and open mind. He said:
His Clause is confined to the Dominions; the result will be to place the company established in the Dominions and producing or manufacturing an article which is also produced or manufactured here at home in a position of preference as compared with the home manufacturer—a preference that cannot be given either to the home manufacturer or producer."—[OFFICIAL. REPORT, 16th July, 1919. col. 547.]
That is an argument for Protection. and it is the worst argument for Protection I have ever heard.

Mr. CHAMBERLAIN: It was a plea for equality.

Mr. SHAW: I will deal with it on that ground. It is a strange plea for equality which says to our Colonial kinsmen. We here will pay single Income Tax, but you henceforth will pay double Income Tax." That, surely, is not equality. I think it is rather a plea for Protection, and I am surprised to find a plea of that kind in the mouth of so eminent and so intellectual a Protectionist as my right hon. Friend. Is his argument that wheat from Canada must be kept out of this market unless the Canadian producer, in addition to the Canadian Income Tax, pays here an Income Tax of 6s. in the £ merely as a penalty for sending it through regular channels? I would remind my right hon. Friend of two things—first of all, that the profit on the sale which the Canadian farmer gets has been earned by his labour, by his skill and by the judicious employment of his capital in Canada, and it is the result of all the purely Canadian enterprise which he has devoted to his business, and, of course, his agents, the wholesalers and the retailers in this country all pay Income Tax up to the hilt on anything which they make by their efforts here. He pays in Canada on what he makes by his efforts in Canada, but to tax the Canadian farmer in this way is to put a premium on the sale of the produce of the farmer in other markets, and to prevent his having a return cargo of our finished manufactures, and encourage him to go to the United States or to some other of our manufacturing competitors. That is the first thing in regard to the god of Protection to whom the lesser god of Preference must on all occasions bow. I must remind my right hon. Friend of something else. The British manufacturer here is not in competition with overseas produce,
which is the only thing with which this Amendment deals. I should be very much surprised to learn that there is any ground for my right hon. Friend's argument that one single British manufacturer has ever in the whole of the last century asked that Colonial producers should be subjected to a new form of double Income Tax, as an additional protection to himself, and I think it is most unfair to our great British manufacturers that such a suggestion should be made. The third argument of the Chancellor of the Exchequer was this. He said at the end of his speech,
There are three possible profits—the producers', the wholesalers', and the retailers' profit. In all these cases arising in this country they are taxed, but arising out of this country they are not taxed."—[OFFICIAL REPORT, 16th July, 1919, cols. 547–548.]
Perhaps my right hon. Friend was misreported.

Mr. CHAMBERLAIN: I trust I was, because that was certainly not what I intended to convey.

Mr. SHAW: If my right hon. Friend was misreported, of course, I will not pursue the matter further.

Mr. CHAMBERLAIN: I do not want to interrupt my hon. Friend's argument, if it is really an answer to the argument I used. My argument is that profits made in this country are subject to tax; profits made outside this country by a non-resident or non-resident company are not subject to tax in this country.

Mr. SHAW: I am much obliged to my right hon. Friend. The whole point is to secure that profits made by purely Dominion or Colonial firms, by their efforts there, shall remain free from Income Tax. I dare say the thing was decided without consultation, or I do not suppose it would have been started, but here the assessors are demanding taxes from Canadian producers, a thing which has never been known before, and which constitutes a grave danger to this country as a market, and so serious a menace to our Imperial relations, that the House of Commons, as the great deliberative assembly of the whole Empire, has a right to take something more than a parochial view of this matter. The supporters of this Amendment ask my right hon. Friend to "think Imperially," as my right hon. Friend's father of honoured memory said before him. I ask him to accept this
Amendment for three reasons. In the first place, there is the reason dear to the heart of every Chancellor of the Exchequer, that it involves no sacrifice of any existing revenue; in the second place, this tax will produce a revenue comparatively trifling and temporary, because it cannot go on, as methods will betaken to avoid the tax; and, thirdly, because at so critical a time as this we cannot afford to take short views and to employ hasty and shallow expedients. I really think, if my right hon. Friend gives this his reconsideration, he will come to the conclusion that in the position in which the country stands at the present moment, with the somewhat dismal picture of the commercial future which lies before us, one of the greatest of our permanent interests is that we should place no fresh barriers in the way of Imperial trade which, if left untrammelled, is bound, in the lifetime of the present generation, to be extended to dimensions which never before entered into the minds of Members of this House.

Brigadier-General Surtees: I beg to second the Amendment.

Brigadier-General Croft: In view of the fact that the Chancellor of the Exchequer has decided that the whole question of double Income Tax should be left over to be discussed by the Committee which has been appointed, I want to express the hope—if I may add my words to those of my hon. Friend, whose lucid explanation of this new Clause must have impressed the House—that my right hon. Friend will accept the Clause anyhow, pending the decision of that Committee, in order that it may be considered. It seems to me that the real point is that the Chancellor of the Exchequer's minions, as they are called, are trying to get hold of the profits of merchandise. If the fact is, as my hon. Friend says, that produce from the Empire is to be taxed twice over—once in the Dominions and once again here—itis intolerable that that should continue. If it is true, it must be perfectly clear that an enormous amount of Canadian produce will come to this country from the United States, because the burden imposed will be well worth the while of these producers sending their products to that country. There is only one thing I want to add, and it is this: The Chancellor of the Exchequer, in answering my hon. Friend, stated that it was really a plea for equality. In the long run the result of this is going to be that either this tax will be avoided, as my hon. Friend explained,
by making use of unrecognised agents, or else produce is going to foreign countries, and we are going to lose the direct trade. The burden of double Income Tax, as this House is well aware, has been one which people in the Dominions feel is a very great hardship. I believe that but for the War the people in the Dominions would not have tolerated it. As we know, individuals have been taxed up to 17s. in the £ owing to the fact that they have been taxed in this country and in Australia by the Commonwealth Government and by the States, and if we are to let it go forth that anything of the same kind is going to happen in connection with the products of the Empire, it will be a very bad day for the country and for the trade which it is so essential to build up between this country and the Empire. I do hope my right hon. Friend will accept this Clause pending the decision of the Committee. He can lose very little, and, if there is any doubt, I hope at any rate he will allow this Clause to be inserted.

Mr. HOHLER: I have listened with great interest to the speech of my hon. Friend, and I confess I do not quite follow his reasoning, and, unless I misunderstood him entirely, I disagree with him. The whole question, it seems to me, has been the difficulty of charging Income Tax in the case of a. man who is carrying on business in this country just as much as anyone domiciled here. There was no machinery by which, though he was carrying on business in this country through an agent, you could charge him Income Tax, and therefore, as I understand, the Amendment to the law was made, and you were enabled to charge him.

Mr. SHAW: Only if he were unfortunate enough to employ a regular agent.

Mr. HOHLER: That is just the thing. If I employ a casual agent I am not carrying on business here, but. if I employ a regular agent he has to enter into a contract with me in this country; in other words, he is carrying on business for me. In this case it is a company in this country just as much as if it were domiciled here, and it would be an easy expedient to escape all taxation to constitute your company abroad, and then raise a cry of Dominion and double Income Tax, and you would get off scot-free of all Income Tax here. The real thing is how to tax a man trading here so that he shall pay the same Income Tax as
a man or company domiciled in this country. It is said that it is an injustice to the Dominions. Where is the injustice? Take a corn merchant. He buys a freight of corn, say, in Canada. He buys at f.o.b., he pays his charges and gets his cargo here. He has to deal on this market and sell it as best he can and make a profit. On that profit he is taxed. Now it is said that the man who in the Dominions takes full benefit of our market, sends his goods here to an agent, the agent having almost certainly entered into a transaction to sell in the market here, and taken the benefit of our prices, is to pay no Income Tax at all!

SIR F. YOUNG: Will the hon. and learned Gentleman deal with the case of the corn merchant who gathers together produce in Canada, ships it to this country, and sells it to an agent: clearly that portion of the profit that he makes here should be taxed in this country, not the profit he makes in Canada, which is taxed there?

Mr. HOHLER: So far as I am concerned —of course this is only my judgment—it does not matter a bit whether or not the produce is f.o.b. I only gave it as an illustration—the merchant in this country carrying on business here who buys f.o.b. But the man abroad has to pay on. his goods here, and therefore it is quite immaterial, in fact, whether he gets the goods gathered or whether he was the grower. He has bought, say, corn in. Canada to send here. He charters his own ship, it may be, and delivers the produce here against bills or shipping documents to the order of his regular agents. It may be that the regular agent helped or arranged the sale before the cargo came from abroad. The Colonial or the company makes the whole of the profit. It has been made in our market. I can see no reason why the Dominion company, or the individual, who deals in that way, through a regular agent carrying on a regular distinctive business here in our market, who is in the law—this is my view—subject to the King's Writ, and can be served in this country, and is bound to appear in our Courts to answer that writ—why, because he is carrying on business here, should be exempted, as suggested. Before we depart from our present practice of taxing the man who is carrying on business in our markets, let us seriously consider the matter. I certainly hope the Chancellor will consider before doing anything of the kind in our present needs. It is
not a question of double Income Tax at all, in my judgment. That arises in regard to investments in War Loan, Consols, and the like, and discourages the Colonial and the foreigner from investing in our securities if they want to do so. In my judgment, it would be wholly unfair to our merchant, who has to deal and buy in the same market as the Canadian, at the current cost, but sells in our market, pays full Income Tax, Excess Profits, and the like. The Canadian company is registered merely in the Dominions. It may be composed of all English shareholders registering their company in Canada—an excellent devise to escape the taxes. I am glad to see that my right hon. Friend the Member for the City of London, who understands these things much better than I do, agrees with my argument. I hope, indeed, that the Chancellor of the Exchequer will do nothing of the kind without full consideration.

Mr. CHAMBERLAIN: The proposal spoken to by my right hon. and learned Friend deals with a subject than which none perhaps is more complicated. But it is not quite so easy to settle as my hon. Friend with his quality of persuasive speech would make us believe. I think in this case he rather confuses the matter by talking of a double Income Tax. We do not help to a clearer understanding of the position by that. The question of double Income Tax is the most formidable question, perhaps, among all the difficult problems for the consideration of the Royal Commission; if not the most difficult, certainly it is among the most difficult. It is of enormous constitutional importance. The aspect of the situation has altered owing to several things in part, and in part owing to the financial position of the United Kingdom in consequence of the enormous sacrifices we have been called upon to make during the War. I do not want anything I say to be held in any way to prejudge that very large question. What has been raised here this afternoon is important, but, in so far as it touches the question of double Income Tax, it is almost an insignificant one, if I may say so. It is an insignificant problem to the problem of the double Income Tax, which is really a much more complicated problem than my hon. Friend would have led us to suppose. He talks as if the basis of the law in regard to the assessment of Income
Tax had been changed within the last few years, and that apparently on insufficient consideration, and in the midst of the War! My hon. and learned Friend probably knows Income Tax law as well as I do. The basis of Income Tax law from the beginning has been that the non-resident—and here we are dealing with the non-resident—is taxable here for profits made in this country. There is no change in the basis of the law. What was found was that there was a development in trade, and the machinery devised to secure the end failed to secure it. The machinery was changed, and the machinery only, by the Act of 1915. Nor was that done without discussion. My hon. and learned Friend spoke with amazement, real or affected—I do not know, and he will forgive me for suggesting the latter—but he suggested a dramatic surprise in respect to the matter! This very subject was a matter of acute debate and discussion at the time of the earlier Debate. Mr. McKenna, then Chancellor of the Exchequer, moved, I think, in the first instance to put in the Clause relating to brokerage in consequence of the strong representations made from many quarters of the House, whose representatives have not been heard in this Debate up to the present time.
The principle of Income Tax law from the beginning has been that the nonresident should pay Income Tax on profits made in this country. If he does not do that he is placed in a more favourable position than the resident. It is not the law that he should pay profits qua Income Tax on the profits he makes outside this country. But my hon. and learned Friend talks as if we were proposing to tax the Canadian farmer on his profits. That is not so. We are proposing to tax the man who sells corn here on the profit he himself makes. If you allow it to be done without taxation then the non-resident who sells to another man is in a better position, as my hon. Friend pointed out, than the resident competitor who buys f.o.b., delivers it, carries out exactly the same transaction, and makes exactly the same profit in this country. Take another case. My hon. Friend who moved the Amendment illustrated his case—specially by the tea companies of India. The tea companies of India are largely non-resident companies—not wholly so, but largely. The tea companies of Ceylon,
are largely resident companies. They pay, do the resident companies, not only on the profits they make here, but on the profits they make anywhere else. They, therefore, pay on the actual profits of production in Ceylon. They have here to pay on the merchant's profit, and the wholesaler's profit, and if they are retailers they also pay on the retailer's profit. Are you to say if such a company is non-resident, or is an Indian company, they shall escape taxation on the profits made here? I do not think you can sustain that position. I do not think it is fair. Let me say that I" am very much puzzled in my own mind—if I may make that frank admission to the House—as to what exactly the law should be. My hon. Friend who moved the Amendment says the tendency of this application of the law is to drive the non-resident agent, who has been accustomed to work through a broker, to continue that, because sales by a broker escape, whilst profits made at the hands of the agent do not escape. I am not sure there is not much force in that. I do not think that there is hardship done to the non-resident, as my hon. Friend suggests; but I think there may be some hardship done to the resident agent, and there may be a tendency to drive non-resident firms into the hands of the brokers.

Mr. A. SHAW: Or to commission agents.

6.0 p.m.

Mr. CHAMBERLAIN: I do not think it clear as to what would be the right course to take. This very matter was under discussion, as I have said, when the change in the law was made in 1915 by Mr. McKenna. It was as a result of that discussion that he made the law what it now is. I do not think it would be right, in view of the arguments put before the House, without much more consideration for the House to reverse the decision deliberately come to only three years ago. My hon. and gallant Friend opposite asked me to accept a Clause in order that the matter might come up for consideration by the Royal Commission, but if I accepted this Clause I should take it out of the purview of that Commission, and prejudge the advice they might give by deciding the matter in anticipation of their consideration. By leaving the Act as it stands I do not prevent the matter being taken into consideration by the Commission, and I hope they will hear evidence from those for whom my hon. Friend spoke.

Mr. SHAW: I was never asked or consulted by anybody on this subject, and it was raised entirely on my own initiative.

Mr. CHAMBERLAIN: I am aware of that because my hon. and learned Friend told me that he had moved upon his own motion, and I do not mean in the least that he is the spokesman of an interest in any improper way. I hope those who in his opinion suffer hardship, the non-resident company or producer, and the resident agents in this country, will put their case before the Commission, and that they will hear the case of the resident companies in competition with non-resident companies, or the resident companies in competition with the non-residents selling through an agent; and I also trust they will hear evidence on the side of the broker and the commission agents. This is too difficult a question for me to decide dogmatically at the present time. I agree that it should be discussed and carefully considered, and I am not satisfied with the position of the law as it stands. I could not, however, act on the information of my hon. and learned Friend because that would prejudge the whole case, and might be a very grave injustice.

Mr. HOLMES: I think this Clause was originally inserted by Mr. McKenna for the purpose of preventing the evasion of the tax by certain Colonial importers of meat, who had opened retail shops in various parts of the United Kingdom, and were invoicing their meat at such a price that the retail shops got no profit at all. That, I think, was the main reason for Mr. McKenna introducing this Clause. It appears to me that the assessors of the Inland Revenue have not merely met that point, but they have gone much further. Their difficulty is to say how much of the profit made by a Colonial merchant should be allotted to the Colonies and how much should go to the profit made here. What they have done is, that they have said, "We will take the whole lot," and that seems a grave injustice.
May I put a specific case? A Canadian merchant buys a large quantity of corn in Canada, takes a ship, and pays the freight, and by the time the corn reaches here it has cost £50,000. If he sells it at £55,000 then that £5,000 was made in this country, but it is made by the Canadian as a Colonial merchant. Let me put a case the other way. Supposing a London merchant gets an order for machinery from Birmingham for Quebec. He ships it out to
Quebec and makes £2,000 profit, but according to the right hon. Gentleman that is a Canadian profit which should be taxed with Canadian Income Tax.

Mr. CHAMBERLAIN: In order to make his case clear, will the hon. Member tell us how he would treat the purchase of the £50,000 worth of corn? The purchase is not made by a Canadian in Canada, but by a merchant in this country, who imports £50,000 worth of corn and sells it at £55,000. Would the hon. Gentleman release the Englishman from taxation?

Mr. HOLMES: The man here is resident in the United Kingdom, getting the advantage of the United Kingdom so far as protection is concerned of the Army and Navy and other things, and consequently he should pay a tax on his profits here.

Mr. CHAMBERLAIN: His profit would be made here. The point of where the profit on the transaction is made depends not upon the nature of the transaction, but on the place of residence of the person who draws it.

Mr. HOLMES: I do not know whether my right hon. Friend is trying to draw a red-herring across my argument, but surely the point is that if a man is carrying on business in a certain country he is liable to taxation on the profits he makes in that country, whether he sells his goods in that country or sends them to a foreign country. I think that is a general principle. If the Canadian merchant sends goods over here he would pay the Canadian Income Tax on his profits, and similarly he would pay in selling in this country and in Canada. English merchants would protest if on everything they sold in the Colonies or in foreign countries upon which they make a profit they were called upon to pay Income Tax in those particular countries. The right hon. Gentleman says that a Canadian merchant who sells corn or anything else to this country should pay Income Tax on the whole of his profit. In trying to secure justice to the revenue he is surely doing an injustice to the Colonial merchants, and he should alter the law or his administrative rules so that the assessment is not upon what are genuine Colonial profits, which should not be taxed in the United Kingdom.

Sir F. YOUNG: I agree with the Chancellor of the Exchequer that the question
is one of very considerable difficulty, but I do not agree that it does not come within the sphere of the double Income Tax question. In many instances that question is not raised, but it is very apt to be raised under the operation of this Clause, and to that extent I think it does come under all the criticism which might be applied to double taxation generally. Whilst I supported the hon. Member who moved this Amendment in Committee, I did so because I think there was a wrong to be righted. At the same time, I think this is one of the questions which cannot be settled except on the consideration of the double Income Tax question generally, and as that is to be submitted to the Royal Commission, I am going to say now that I think the Chancellor of the Exchequer is right in saying that this ought to go to the Royal Commission as well. The Royal Commission are meeting the question in a very practical manner, inasmuch as they are inviting representatives from all the Dominions to come here and meet them in conference to discuss this question from a practical point of view. That conference is likely to meet some time in September, and I am hopeful that the outcome of it will be a practical and happy solution. That conference might very well deal with the question raised by this Amendment.
As to the problem itself, I think the Chancellor of the Exchequer put a proposition to the last hon. Member who spoke which exactly explains the whole case. Taking wheat as an example, the produce which is shipped to this country from the Dominions is usally shipped by companies or persons who buy in the Dominions in large quantities, and it is not sent by individual farmers to any extent whatever, but by large companies or merchants who buy very large quantities. They cannot buy without incurring a great deal of expense. They have elaborate machinery and agencies throughout the country by which they gather their bulk at different points, and then they send it here and eventually make a profit. The point is that some of that profit should be allocated to the very elaborate business which is carried out in the Dominions in question, and another part of the profit should be allocated to this country, and only that part should bear taxation in this country. I think that will be accepted as a sound way of dealing with the question.
Let us look at the other side of the case. A merchant over here buys a cargo of wheat, but he buys on the f.o.b. basis, which has provided the profit to the merchant in the Dominions. That includes the profit made in the Dominions and it is taxed there. That merchant brings his cargo and sells it here at a profit to himself, and on that profit he rightly pays the tax in this country. The f.o.b. sale is a very happy instance of how the profits are really divided—that is, the profit allocated to the Dominioins and that which belongs to this country. What we want to do is by some machinery to bring about that same dividing line in the case of the non-resident company or merchant who collects his goods in the Dominions and sells them in this country. Obviously, it is not an easy question, and it has to be done on some principle to do justice. It is in that case, where the seller here is a non-resident, where he does actually pay double Income Tax. When the merchant gathers together 1,000,000 or 5,000,000 bushels of wheat, which he sells over here, he has to return on his Income Tax papers to his own Dominion Government a statement showing how much it cost him to gather that wheat together and what he got for it in London, and he is taxed in the Dominion according to the rate of taxation there upon the whole of that profit. If that profit, made in London, is again taxed here, without any division, then, as regards that part of the profit which is properly allocated to the Dominion, it does pay double Income Tax, and to that extent it comes under the double Income Tax evil which has been so discussed in this House from time to time. Whilst I support the new Clause, inasmuch as I believe that there is a very solid injustice to be remedied in this question, which is incidental to double Income Tax, yet it seems to me that, as the Royal Commission are making a very fair effort to come to some practical solution, and are inviting representatives of the Dominions to help them, I suggest that the hon. Member who moved the Clause might, having ventilated the question, leave the matter, with a view to a solution of the problem coming from that quarter. I speak feelingly on the question because I happen to be chairman of the association which constantly makes protests on the subject of double Income Tax and, whilst we appreciate the delay which Royal Commissions involve, we have accepted, at any rate, the fact that there
is a Royal Commission, and we are endeavouring by every means to bring the practical side of the question before that Commission, because we believe that an earnest attempt is being made to get rid of an admitted injustice.

Mr. SHAW: Will the Chancellor of the Exchequer leave the law as it is at present, seeing that the exact state of the law may very soon be a matter of discussion in the Courts? Will he let the whole question remain sub judice until the Income Tax Commission has reported? Let him give a general instruction to the assessors that until the Income Tax Commission have reported on this question they shall not proceed any further in the new direction. That is not an unfair thing to ask. The Chancellor of the Exchequer will remember that this is an entirely new and hitherto untried experiment which is being engaged in by the assessors. If he would leave the matter sub judice I should be satisfied.

Mr. CHAMBERLAIN: The hon. Member asks me to do what I have no right to do. It is a very dangerous thing to invite a Minister to exercise discretionary power of that kind. It might lead to a Minister meeting with the tragic fate which overcame some of our predecessors. The hon. Member opposite stated what ought to be the law in respect to dividing profits with regard to business done in Canada and business done here. That is a division that is now made. Of course, the division in any particular case may seem to the individual affected to be unfair. That is what the taxing authority endeavours to arrive at.

Mr. SHAW: As the Chancellor of the Exchequer has met us with great courtesy, and I am anxious to save the time of the House. I beg leave to withdraw the Clause.

Motion and Clause, by leave, withdrawn

NEW CLAUSE.—(Amendment of 8 and 9 Geo. V., c. 40, 8. 15.)

The words "income from saved money" shall be substituted for the words "unearned income" in Section fifteen of the Income Tax Act of 1918, and in any other Section or Schedule of any Act where the words "unearned income" occur.—[Mr. Stewart.]

Brought up, and read the first time.

Mr. STEWART: I beg to move,
That the Clause be read a second time.
This is merely a verbal and drafting Amendment. It will cost the Chancellor
of the Exchequer nothing, and I hope he will be able to gave favourable consideration to it. My objection to the term "unearned" in our Finance Act is that it is an incorrect definition. There is no such thing as unearned money. There may be different opinions as to how it is derived, but it is always earned by somebody. You rightly treat pensions as deferred pay, and I say that the man who has to make his own pension requires similar consideration, and you should not subject him to the undeserved taunt of saying that he is living on unearned money in his old age. People advanced in life who are dependent upon the money they have saved find themselves in many difficulties to-day, because prices are high, their incomes are much reduced, and they are taxed at the highest possible rate. On the top of this it is very hard to reproach them by saying that they are living on unearned money. I remember hearing Mr. Asquith make a very strong speech in this House about sloppiness of definition. With all respect, I say that the word "unearned" money in the Finance Bill comes under that term of sloppy definition. I have had a letter from an old man who is nearly eighty years of age. He was a music teacher up to recently, and after fifty years of work he retired, but has has had to go back to work owing to high charges and the 6s. Income Tax. He protests against the fact that he and his wife on their little competence are said to be spending the remaining years of their life living on unearned money.
There are many widows in this country, with children of fathers who have given their life for their country, who have a hard struggle to educate their children. When they have a small income from investment it is altogether wrong to say that these children are being educated on unearned money, after their father has given his life for his country. People talk about money being earned by their own unaided effort. No one does that. The production of money is a matter of combined effort. It is said that a man who tills the soil cannot do it unless he is provided with a spade or a plough from a brother workman. We could not have our ships sailing the sea or our workshops filled with machinery if there were not people who had saved money and had put down capital with which to run these institutions. Those people who spend their money as it comes are very often gallant
and lovable people, and the world would be much poorer without them, but as times are to-day they are not much use to the Chancellor of the Exchequer, who has to finance the country after a great war. The best people for him are those who have saved money and who have money to lend him, or whose credit is so good that they can go to their bankers and get money to their credit in order to lend it to the Chancellor. They, therefore, put at his disposal both their money and their credit. The term "unearned money" lends itself to much misrepresentation, and the unscrupulous agitator can misrepresent it in the most dangerous way. He can go about saying that there are lots of people in this country who have plenty of unearned money, that there is a bottomless pit of unearned money belonging practically to nobody in particular, and that those who have been self-denying and laborious are merely a multitude of loafers and parasites. The Victory Loan has been a success of a sort, but what would it have been if we had not had people who have earned their money and saved it and lent it to the Chancellor of the Exchequer? They have rendered unto Caesar the thing for which Caesar asked them, and I appeal to the Chancellor of the Exchequer in the name of Caessar that he should remove the stigma which the word "unearned" unjustly casts upon people in this country.

Mr. G. TERRELL: I beg to second the Motion.

Mr. CHAMBERLAIN: I have a great deal of sympathy with the motives of my hon. Friend. We all agree that the distinction between earned and unearned income is not a very happy one, and that it does not correctly describe the position I admit that it does give rise or lends itself to misapprehension. It is not, however, very easy to find language which will accurately describe the distinction between the two. The Select Committee of 1906 which dealt with the question reported on these lines:
Before your Committee considered the practicability of differentiating between permanent and precarious incomes, they felt it desirable to define clearly the meaning of the terms 'permanent' and 'precarious.' Other terms which have been used are 'industrial' and 'spontaneous,' 'earned' and 'unearned,' and incomes resulting from 'investment' and 'personal effort.' It is obvious that there are incomes from investments which are not 'permanent.' There are also incomes which are 'earned' by 'personal effort' which are less 'precarious' than many which are derived from
investments. Probably the words 'earned' and 'unearned' most accurately represent the distinction we have in our minds.
Accordingly, the words "earned" and "unearned" were adopted. There is no definition in the Act of "unearned." Unearned is the natural counterpart to earned. "Income from saved money" instead of the term "unearned" would mean a much more elaborate Clause to define it than that which the hon. Member has drafted. Possibly we may have a suggestion from the Royal Commission on this point, and I hope the hon. Member will be content to wait and see whether they can find any happier language to properly define the distinction. I hope, therefore, he will not press his Amendment.

Mr. MARRIOTT: The hon. Member who proposed this Clause described it as a verbal alteration, but it seems to me it is one of very great substance indeed, and I hope very much that he will continue to press it on the attention of the Chancellor of the Exchequer and also on the attention of the Income Tax Commissioners. This is a matter of grave importance. The point as it presents itself to me is, however, exceedingly simple, and I would venture to put it to the right hon. Gentleman in this way—does he or does he not wish to encourage the people of this country to save their incomes? If he wants to encourage them to spend their incomes up to the hilt, then he had better persist in the course of differentiating between earned and unearned incomes and imposing a higher tax upon the latter, but if, as I understand, one of the great objects of his policy is to induce people to refrain from spending their incomes and to invest a portion of those incomes in Victory Bonds, then I suggest he should listen to "he arguments put forward by my hon. Friend opposite and take some steps in the direction of reversing the policy introduced in the year 1907 by, I believe, Mr. Asquith. I am quite sure he will never induce the people of this country to be really thrifty, and to abstain from spending the incomes they earn, so long as he maintains this mischievous distinction.

Major MOLSON: I should like heartily to support my hon. Friend in the proposition he has moved. I agree it is more than a simple play on words. Let me take one case as an illustration. You
have an industrious man who started with practically no capital at all, but during the course of his lifetime he has accumulated a capital, every penny of which he has earned. He has accumulated it in order to provide for himself in, old age and for his family. Why should that man be stigmatised as having an income derived from unearned capital when, as a matter of fact, he has earned every penny of it in preceding years. I submit that the income from that ought not to be taxed at a higher rate than the income earned during the present year.

Captain WEDGWOOD BENN: If I understand the Amendment aright, it urges that there should be no distinction made between money earned by present work and money which is derived from accumulated savings of the person taxed or from the accumulated savings of others, and that being so, I think someone should rise and point out that one of the principles of taxation in this country is, and has always been, that money derived—

Mr. MARRIOTT: This special differentiation only dates from 1907.

Captain BENN: But the hon. Gentleman who interrupts me challenges the whole principle, although the hon. Member behind me talks of the proposal merely as a verbal alteration. I think somebody should point out that it is proper there should be a higher rate of tax charged on money accumulated and money inherited.

Mr. SPEAKER: This Amendment only relates to the cases where the words "unearned income" are used in Section 15 of the Income Tax Act of last year. It is really therefore only a verbal Amendment.

Captain BENN: But does not the Amendment go on to say "and in any other Section or Schedule of any Act"?

Mr. CHAMBERLAIN: I submit it was intended by the Mover only to be a verbal alteration. It is quite true that the hon. Member opposite did raise the question whether there ought to be any distinction at all, but all this seems to do, while keeping up the distinction, is to describe it under a different name.

Sir F. BANBURY: The Amendment is no doubt intended to make a verbal alteration, and I will not go into the other
question whether or not earned and unearned incomes should be treated differently, except to say that I agree with the hon. Gentleman opposite that a man who has saved money, instead of being penalised, should really be rewarded for so doing. But that is not the Amendment before the House. I do think that some alteration ought to be made in the differentiation of these particular incomes. I am not quite sure that the word "savings" is a very happy one, because as my hon. and gallant Friend opposite said, the words as they stannd do include incomes which may have been derived by inheritance or from some other source. But where a man has denied himself in his youth of certain pleasures to which young men are usually addicted, and where he has done so in order to provide for his old age or for his children, it is hard that he should be taxed more than the spendthrift, and that in addition he should be taxed as if it were unearned income. Possibly my right hon. Friend may not be able to accept the Amendment now, but would it not be possible in another place to make the desired alteration? Surely he and his advisors ought to be sufficiently clever to find words which would express their meaning without stigmatising a man who has done his duty to the State by saying he shall be taxed on unearned income.

Mr. STEWART: I hope the sympathy expressed by the right hon. Gentleman was sincere, and that he will induce those who may have the responsibility for the wording of future Finance Bills to try and devise less offensive words than those. Under the circumstances I beg to ask leave to withdraw my proposal.

Motion and Clause, by leave, withdrawn.

NEW CLAUSE.—(Amendment of s. 36 of Finance Act, 1916.)

Notwithstanding anything contained in Section thirty-six of the Finance Act, 1916, or any enactment relating to Super-tax, there shall be allowed in the assessment for the purpose of such tax and in respect of payments made for life insurance premiums upon policies effected before the twenty-second day of June, nineteen hundred and sixteen, such sum not exceeding one hundred pounds, as may appear to have been paid by and upon the life of the person liable to such assessment.—[Sir H. Nield]

Brought up, and read the first time.

Sir H. NIELD: I beg to move,
That the Clause be read a second time.
In bringing this matter again to the notice of the Chancellor of the Exchequer I hope I shall find him a little more sympathetic than he showed himself to be in Committee. I want to make it perfectly clear that it is only desired to limit the sum to £100, and I want also to say that while I appreciate the courtesy of the right hon. Gentleman in showing me the memoranda which he has had prepared on this occasion to guide him on the various questions raised on the Finance Bill, I have since verified my information by a careful examination of the Debates which took place in 1916, both on the original Resolution, on the Committee stage, and on the Report stage I am quite sure there are many Members of this House who will appreciate the hardship of the present state of things. I may start by pointing out, with reference to the Super-tax, that from 1910, when that tax was first imposed, down to 1016 there was no attempt to differentiate between Income Tax and Super-tax. I want the House, if it will, to follow me while I briefly sketch the history of the subject. Ever since the passing of the Income Tax Act of 1853 there has been allowances made in respect of premiums on life insurance, and there has been no attempt to restrict these allowances until recent years, when it was found necessary to put a limit on the deductions to the extent of a sixth of a person's income. I do not think that anyone will complain of that. But in the year 1916, owing to the action of certain life offices, the then Chancellor of the Exchequer (Mr. McKenna) had his attention called to a number of devices whereby people avoided the payment of Income Tax, amounting then to 3s. in the £, and also avoided Super-tax, by an ingenious method of policies which these very adventurous companies offered. I find in the report of the speech made by Mr. McKenna in this House in 1916, that there was a return of 7½ percent. on these investments—no doubt a very attractive offer to the people effecting these policies in order that they might be able to deduct the amount of the premium from their annual Income Tax return.
Thereupon the Chancellor of the Exchequer introduced this Clause, which gave rise to a very considerable amout of alarm in life insurance circles amongst those companies which were in the habit of offering these inducements. I complain
bitterly that the Chancellor of the Exchequer, in dealing with this in the 1916 Debate, referred to what was done as a kind of compromise which should be binding upon the House potentially for all times. What occurred was this. There was an interview with representatives of the life offices, who feared that their artful proceedings would no longer be possible if the proposals then foreshadowed found their way into the Finance Bill; they feared they would be deprived of an opportunity of continuing this very questionable business. There was a compromise between them and the Chancellor of the Exchequer, but it had no reference to public demand. What it did was to provide that in respect of policies of life insurance or deferred annuities effected after a definite date in June, 1916, they should not be allowed a greater deduction from Income Tax than 3s. in the £, and then by some means words were allowed to creep in that Super-tax only was excluded from the benefit of exemption. So that we have it by the Act of 1916 that a person can deduct up to a sixth of his income all the sums of money paid by way of premiums on policies effected before 22nd June, 1916. Subsequent to that date he can only deduct on new policies 3s. in the £, and in respect of Super-tax for the first time he was denied relief of any kind. That is a great hardship. In particular, in these days When the limit of Super-tax has been reduced by successive Budgets, it presses very hardly on a large body of persons whose incomes have now been brought within the limit of Super-tax. The Government is taxing a man on an income which he does not have at all, and in many respects is doing a very considerable injustice in the manner in which Super-tax is levied. I am not allowing him to insure someone else's life and ask for a reduction of premium, but I am asking that the thrifty person who is trying to make provision, if it is an endowment policy for his old age, but in the more common case in order that his family may benefit by the policy, should have relief from Super-tax to the extent of £100 during the current year for which the tax is being levied. The Chancellor of the Exchequer answered me in these terms:
After hearing arguments by my predecessors, my hon. Friend now asks to have these decisions in part reversed. I am sorry that I cannot accept his proposal. The present arrangement is something in the nature of a compromise. Policies of insurance with a rising rate of In-
come Tax and Super-tax were being used, not as an insurance against death or a contingency of that kind, but to insure against Income Tax and Super-tax. The actual position of the law now is something in the nature of a compromise. I venture to say one word more. I think my hon. Friend has chosen an unfortunate moment for asking for an extension of relief in respect of the provision made for Death. Duties.
My proposal had no relation whatever to Death Duties. It was simply an ordinary current policy which formed part of a man's estate out of which the Death Duties would be payable as a whole, and. not as an insurance against Death Duties. My right hon. Friend went on—
There is an unrivalled means of provision for Death Duties in the Victory Loan. Insurance companies have issued statements giving the conditions. I could not possibly consider a. further proposal in respect of such matters. It is a very great concession to those to whom such considerations would apply to allow Victory Bonds which are subscribed at £80 to be received for Death Duties at £100."—[OFFICIAL REPORT, 16th July. 1919, cols. 637–8.]
A totally irrelevant speech. The point was not in issue at all. I ask the House on Report to consider the position of a man who, having had certain obligations and an expensive family to bring up, finds his income swept into the pool for Super-tax. He has been accustomed to spend up to his income in maintaining the standard of life which he has always held and to provide for the increasing burden of education and the putting out in life of his children. Suddenly, by reason of the necessities of the Chancellor of the Exchequer, the liability for Super-tax is put upon him by reducing the limit. Originally no one under £5,000 a year would be liable to Super-tax. That has gone. Such a man, brought suddenly into that position, having to meet his current expenses, and especially in these days-having to meet the enormous increase for maintenance, is only reasonable in asking that there should be, in respect of Super-tax, an allowance for moneys which are paid out on his own life for current insurance for the benefit of those who are to come after him, and upon which at his death the State takes its share in the shape of duties. I do not ask for any advantage for those who were speculating wildly, apparently, previous to the Bill of 1915, but I ask that thrifty persons, situated as the man I have described, shall be protected, and it is only reasonable, limiting it to £100 in respect of the current year upon his own policy on his own life, that
it should be conceded and that there may be to that extent a continuation of the old rule that Super-tax follows Income Tax.

Mr. STEWART: I beg to second the Motion.
Considering the moderate way in which my hon. and learned Friend has put it, and seeing that Super-tax is now charged in cases where there are large families, and in view of the existing high prices, I think this is a concession which my right hon. Friend might gracefully give without loss.

Mr. BALDWIN (Joint Financial Secretary to the Treasury): Even if I am not able to give the hon. and learned Gentleman what he requires, I will be as conciliatory as possible. I am very glad that we are on the Report stage, where second speeches are not allowed, so that it will not be within his competence to rise after I have finished and say my reply has been irrelevant I entirely agree with him that it is a hardship. All taxation, direct and indirect, is a hardship. I can have no complaint of his raising this question, because every taxpayer, from the wealthiest down to the poorest, when he sees the scale on which taxes are imposed to-day, naturally tries to secure some amelioration for himself and his friends. The hon. and learned Gentleman gave a very accurate account of the history of this subject, with one exception. He spoke about the Clause having reference to the exclusion of this privilege from the Super-tax in the 1916 Finance Act as having crept in. It did not creep in at all. It entered walking erect, with a flourish of trumpets. If the hon. and learned Gentleman had pursued his investigations so far he might possibly have discovered that the very suggestion which materialised in that tax came from the insurance companies themselves. The Clause which the Government put down did cause them confusion and terror, and they suggested that the 3s. limit which now exists should be put in for the rebate and that Super-tax should be excluded, and on those lines the final Clause was drawn up and submitted to Parliament and passed into law without revision. The hon. and learned Gentleman said Super-tax should follow Income Tax. I would rather look at it in this way: What we call Super-tax and what we call Income Tax combined are simply Income Tax, and Parliament has decided that for the purpose of Income Tax 3s. shall be the limit of the rebate which is allowed to the
man who pays a premium on his life insurance. It may be contended that it is a hardship that you are not allowed more, but surely it would be equally true to say it is a privilege to be allowed to get anything back at all. There is no real reason why you should get anything back at all. except that the State in its wisdom—I think on the whole rightly—decided years ago that some encouragement should be given to thrift. There is encouragement now to the extent of 3s., an extent which some years ago would have been considered very satisfactory, but I am afraid my right hon. Friend is quite unable to recede from the position that he has taken up. I look on this matter as a case which has been settled by Parliament. It was settled in the Finance Act of 1916. Sporadic attempts have been made on the principle, notably last year, when an hon. Member who is no longer in the House moved a Clause or an Amendment on the subject which was negatived without a Division. I am sure what I have said has not been in the slightest degree satisfactory to the hon. and learned Gentleman, and I very much regret having been the vehicle of so unpleasant a communication. I hope he will not press the Clause any further.

Sir H. NIELD: The hon. Gentleman's very graceful words are such that I cannot resist. I must withdraw the Amendment, at the same time thanking him for the way in which he has expressed himself, and the great care with which on this occasion he has conveyed his negative to me.

Motion and Clause, by leave, withdrawn.

NEW CLAUSE.—(Amendment of 8. 26 of Income Tax Act, 1918.)

The proviso to Section twenty-six of the Income Tax Act, 1918 (which provides for the cases in which an individual, though not resident in the United Kingdom, is to receive relief from Income Tax), shall have effect as though for the words "any widow who is in receipt of a pension chargeable with tax and granted to her in consideration of the employment of her late husband in the service of the Crown" there were substituted the words "any widow whose late husband was in the service of theCrown."—[Mr.G.Locker-Lampson.]

Brought up, read the first and second time, and added to the Bill.

NEW CLAUSE.—(Appeal from Direction of Inland Revenue Commissioners.)

Notwithstanding anything contained in paragraph five of Part I. of the Fourth Schedule of the Finance (No. 2) Act, 1915, an appellant may, if he is dissatisfied with the direction of
the Commissioners of Inland Revenue, have the right to appeal there from to the Commissioners for the General Purposes of the Acts relating to Income Tax or to the Commissioners for the Special Purposes of those Acts, and all regulations concerning an application for a case to be stated for the opinion of the High Court from the decision of the General or Special Commissioners shall apply."—[Mr. G. Terrell.]

Brought up, and read the first time.

Mr. G. TERRELL: I beg to move,
That the Clause be read a second time.
I hope the Chancellor of the Exchequer will be able to accept this Clause. The intention is to remedy a very real grievance. It all arises out of the Finance Act, No. 2, of 1915, which was passed in a very great hurry. Under the Fourth Schedule, paragraph (5), it is provided that:
Any deduction allowed for the remuneration of directors, managers, and persons concerned in (the management of the trade or business shall not, unless the Commissioners of Inland Revenue, owing to any special circumstances or to the fact that the remuneration of any managers or managing directors depends on the profits on the trade or business, otherwise direct, exceed the sums allowed for these purposes in the last pre-war trade year.
7.0 p.m.
From that it will be seen that the manager of a business is limited to the remuneration of a pre-war trade year—that is, five years ago. Then there is an. appeal to the Commissioners, under which they can increase that allowance for special circumstances. There is a good deal of complaint, and I think it is well founded, that the Commissioners are acting somewhat arbitrarily, and that they are not giving the fullest consideration to the circumstances of each particular case. What I seek by my Clause is to give any person who feels aggrieved the right of appeal to the Commissioners for the General Purposes of the Acts relating to Income Tax or to the Commissioners for the Special Purposes of those Acts. I do not think my right hon. Friend would really be worried with many appeals, but it would be a great concession to people who have a very solid grievance if he could see his way to give them a right of appeal. That is all I ask. I have been asked to deal with this Amendment by an employer's organisation. There is a genuine grievance that these cases are not receiving the full sympathetic consideration to which they are entitled. I do not want to press the case unduly. If my right hon. Friend, for any reasons of his own, does not wish to accept the Amendment in this form, I shall be quite satisfied
if I have an assurance from him that in any case of special grievance he will look into the matter personally. That is not an unreasonable request to make. He has to remember that the Finance Act of 1915 would never have gone through at any other time than a period of grave emergency. It was accepted by the House. We did not examine it Clause by Clause, as we should to-day; it was purely a war measure. The War is happily over, and my hon. Friend ought to regard complaints of this character with a sympathetic ear. I only want a right of appeal. My case is simply this. There are instances where the Commissioners are acting oppressively. When a person is aggrieved, give him a right of appeal from those Commissioners. I do not care one bit to whom the appeal should be made, but we just want to feel that there is a right of appeal, and we should then have some confidence that instead of the arbitrary, aggressive manner in which these cases are at present being dealt with greater consideration would be shown to each particular case. I do ask my right hon. Friend to be sympathetic in his reply. He has made very few concessions this afternoon. Here is an opportunity for him to make a concession which I do not think will cost the Treasury anything, but will give a great deal of satisfaction to people who have a grievance. I do not want to confine him to the terms of the Clause. If he will state to the House that he personally will look into any case of grievance I shall be perfectly satisfied to leave it in his hands, but I do ask that the grievance shall be met in some form or another.

Mr. G. LOCKER-LAMPSON: I beg to second the Motion.

Mr. BALDWIN: This is a subject with which my hon. Friend and myself are quite familiar, and I do not think I need keep the House more than three or four minutes in saying what I have to say upon it. There was a reason, in the case of these rules dealing with excess profits, for not giving a right of appeal, and I think it might just clear our minds if we recollect that that reason was: Whereas, in regard to Income Tax practice, you had more than half a century of custom and precedent behind you, here, in regard to excess profits, you were starting new machinery dealing with an entirely new and hitherto untried method of taxation. It was perfectly obvious, in those circumstances, that if you were to got any uniformity of practice—and uniformity of practice in taxation is essential
for dealing even-handed justice amongst the taxpayers—you must concentrate your authority for interpreting rules in as few hands as possible, and not give a right of appeal to various bodies of authorities situated in different parts of the country who would certainly have taken widely different views on the same points submitted to them in different districts. That was the reason. This system has worked from the inception of the Excess Profits Tax, a matter of something like five years. The Excess Profits Tax is getting very near its end, and I cannot see that any advantage could come to anyone in altering, in what may be its last months, a tax, and substituting a different method of conduct from that which has obtained during the greater course of its existence. I would only say one more word, and that is that I do not think my right hon. Friend would have tire time to set himself up as an arbitrator in these difficult and complicated cases. But I will give my hon. Friend this assurance, that at any time he likes to bring to me cases that he thinks deserve investigation I will give them my personal attntion.

Mr. TERRELL: The hon. Gentleman must know that individuals do not bring their cases to a Member of this House. He must know that all these cases are private and confidential. He has records of them.

Mr. BALDWIN: If they are private and confidential, of course, I do not see them; that is the difficulty.

Mr. TERRELL: The Treasury have them.

Mr. BALDWIN: My hon. Friend, through the association with which he is concerned, will have every opportunity of bringing grievances before me. I am quite sure that on any typical grievance that he maybe in a position to bring I might possibly be able to confer with the Inland Revenue authorities to some advantage.

Mr. TERRELL: Before the hon. Gentleman concludes. May I take it as his reply that he will look into cases which are referred to him by any of the important employers' organisations?

Mr. BALDWIN: I want to be quite clear on this matter. I am quite willing to investigate typical cases in which there may be a real sense of grievance. I make no offer to stand as arbitrator or a court of appeal. I would remind him, what he pro-
bably is not aware of, that though these rules have been in existence six years, and. though they have been administered by this system of which he complains, the actual complaints reaching the Departmemt have not been numerous. My impression, from the discussions I have had with the Inland Revenue people, is that, generally speaking, there is satisfaction. Of course, there always will be people who think they ought to get a great deal more than they are getting, and I cannot hold out any hope to them that anything I should do will ameliorate their position.

Question put, and negatived.

NEW CLAUSE.—(Amendment of Finance (1909–10) Act, 1910. s. 86. Part-year Motor Car Licences.)

In the case of excise licences for motor cars granted after the passing of this Act in the year nineteen hundred and nineteen, or in any subsequent year, the duty upon payment of which the licence may be granted shall be reduced by one-quarter of the full amount of the duty if the period for which the licence will be in force begins on or after the first day of April but before the first day of July, by one-half if the period begins on or after the first day of July but before the first day of October, and by three-quarters if the period begins on or after the first day of October.—[Colonel Gretton.]

Brought up, and read the first time.

Colonel GRETTON: I beg to move.
That the Clause be read a second time.
It relates to the payment of the Licence Duty taken out on motor cars. This is an old grievance, which has been mentioned more than once before in this House. Various objections to amending the law have been urged, but the fact is that the duties come high on many classes of motor cars for a whole year in cases where the licence is taken out at the latter end of the year. This is to some extent acknowledged, because the Treasury, after the 1st of October, charge only half a year's tax for the last quarter of the year, so that a man who has to take out a licence on the 15th of September would pay a whole year's tax, whereas if he takes it out on the 2nd of October he pays half a year's tax. In both cases he will get only a portion of the year, but in the one case he will get only a few days more than a quarter of the year in which to use his car, for which he has to pay this very high licence. The form in which the Clause is drafted is to meet the objection which has been raised that such an alteration as is proposed would not be administratively possible. But it is quite possible to give directions that after a given date—say the
1st of April in any year—three-quarters only of licence tax should be charged; after the 1st of July one-half only; and after the 1st of October one quarter. That is not a very serious matter. It may be made an objection that motor cars are pleasure vehicles. Motor cars, especially the cheaper class of car, are used now very largely for business purposes. They are used, as everyone knows, by doctors, veterinary surgeons, farmers, travellers, and by many business men. In order to get about from one place to another, where their businesses are being conducted, they have to employ motor cars. The motor car is no longer a pleasure or a luxury; it enters seriously into the business life of the country, and it is from that point of view that I venture to put this Clause before the House. I would not care to argue such a Clause on the case of a luxury car such as would now realise £2,000 or upwards. If anyone can afford to purchase such a car, he would have no cause to quarrel at having to pay a whole year's duty for a portion of the first year of its existence. It is on the general principle, which everyone will share, that I urge this new Clause in order that a very real grievance and sense of injustice may be removed. I cannot think that the cost of this will be any serious matter to the Exchequer; in fact, it may well be that more licences will be taken out at the end of the year, and that the Chancellor of the Exchequer will, as a matter of fact, get a good many quarterly and half-yearly licences paid for which otherwise he would have to wait until a later year to collect. An arrangement of this kind would work both ways, and, on balance, I am confident that he is not really standing to lose any serious amount of revenue by the acceptance of this Clause, while he will give a very great deal of satisfaction to a large number of persons and remove what is undoubtedly a grievance.

Mr. CHAMBERLAIN: This Clause follows a proposal which my hon. and gallant Friend made in Committee, and it is a successful endeavour on his part, to meet one of the objections which I pointed out to the particular Clause which he then suggested. His original suggestion was that the licence should be varied, not only quarter by quarter but day by day. It has been recognised in the scheme which obtains at present that there is a difference between a car which
is only used during the last six months of the year and a car for which the licence is taken out during the first half of the year. My hon. and gallant Friend now asks that the charge may be differentiated every quarter, and he assures me that, in his opinion, I should gain as much as I should lose, because more people would take out licences in the concluding quarter of the year who now postpone the taking out of their licences until the new year. It is very difficult to speak with confidence on matters as speculative as that. I am always astounded myself at the accuracy with which the Inland Revenue or other revenue authorities are able to forecast the results of changes in the law one way or the other, the effect of which I should have thought it would have been impossible to predict. I do not lay too much stress upon their opinions in this particular matter, but they advise me that I should probably be a loser, and that one effect among others would be that the owners of luxury cars—just that class of owners whom my hon. and gallant Friend does not wish to protect—would lay up their luxury cars in the bad months of the year and only take out their licences in the good ones. I see no reason, whatever may bethought about the case of the smaller man which my hon. and gallant Friend has particularly at heart, to relieve the owners of such luxury cars of the charges which Parliament has decided should be placed upon their use, and I am afraid it would be quite impossible to differentiate between the two classes. I do not think there is any widespread sense of grievance. Nobody has made any representations to me on the subject, except my hon. and gallant Friend himself. I do not know whether it is he himself or some of his Friends who feel particularly distressed by the fact that they could not take out a licence for a car for a quarter without having to pay for six months; but I think such people are very few, and I hope he will not press the Clause.

Colonel GRETTON: After what the right hon. Gentleman has said, I cannot very well press this matter further, especially as I do not want to take up the time of the House. But I hope it will not be lost sight of. I think my proposal is essentially a just one, and that any administrative difficulties could be easily overcome.

Motion and Clause, by leave, withdrawn.

The following new Clause stood on the Paper in the name of Major COURTHOPE:
Sub-section (12) of Section eight of the Finance Act, 1894 (which provides for the recovery of the excess when Estate Duty has been overpaid), shall, in its application to over payments made after the commencement of this Act, have effect as though four percent. were substituted for three percent. as the rate of interest per annum.

Mr. SPEAKER: This Clause imposes a charge. Where Estate Duty is repaid after having been improperly collected the Finance Act of 1894 provides for the payment of interest at the rate of 3 percent. The hon. and gallant Member proposes to raise that to 4 percent., and that would impose a charge on the taxpayer, who will have to find the money.

CLAUSE 1—(Continuation of Customs Duties Imposed under 5 and 6 Geo. 5, s. 89.)

The following duties of customs, except the new import Duties, imposed by Part I. of the Finance (No. 2) Act, 1915, shall, subject as hereinafter provided, continue to be charged, levied, and paid until the first day of August, nineteen hundred and twenty, and as regards the new Import Duties until the first day of May, nineteen hundred and twenty, that is to say:


Duty.

Section of Act.


Increased duty on tea
…
1


Additional duties on dried fruit
…
8


Additional duty on motor spirit
…
10(1)


New Import Duties.
…
12

Mr. CHAMBERLAIN: I beg to move, to leave out the words "except the new Import Duties."
These are purely drafting Amendments, putting into proper language Amendments which I have accepted during the Committee stage in deference to opinion widely expressed in the Committee.

Amendment agreed to.

Further Amendments made:

After the word "paid" ["continue to be charged levied and paid"], insert the words
in the case of the new Import Duties until the first day of May, nineteen hundred and twenty, and in the case of any other duties.

Leave out the words
and as regards the new Import Duties until the first day of May, nineteen hundred and twenty." [Mr. Chamberlain.]

Captain W. BENN: On a point of Order. I have some Amendments down on the Paper which were intended to raise the
question of the Import Duties and the question of Preference on them. These are matters on which some of us hold very strong opinions. May I ask your ruling, Mr. Speaker, as to whether they can be raised in this Debate?

Mr. SPEAKER: No. In a previous ruling this afternoon, when perhaps the hon. And gallant. Member was not here, I announced that this matter, having been very thoroughly discussed in Committee—I think it took a whole day and a considerable portion of the following day—I did not propose to call any of the Amendments dealing with the preferential duties.

CLAUSE 6.—(Increase in Duty on Private Brewers' Licences.)

(1) In lieu of the existing duties upon licences to be taken out annually by brewers of beer other than brewers fur sale there shall, on and after the first day of October, nineteen hundred and nineteen, be charged, levied and paid the following duties of excise (that, is to say):



£
s.
d.


If the beer brewed by the brewer is chargeable with duty
0
4
0


If the beer brewed by the brewer is not chargeable with duty, then— (a) where the brewer is the occupier of a house of an annual value exceeding ten pounds, bat not exceeding fifteen pounds
2
10
0


(b) where the brewer is the occupier of a house of an annual value of ten pounds or less
1
5
0

(2) If the annual value of the house occupied by a brewer of beer other than a brewer for sale does not exceed ten pounds, duty shall not be charged on beer brewed by him, and if the annual value of the house occupied by him exceeds ten pounds and does not exceed fifteen pounds, duty shall not ha charged upon beer brewed by him provided that he brews solely for his own domestic use.

Mr. CHAMBERLAIN: I beg to move, at the end of Sub-section (1), to insert the words
Provided that where the brewer is the occupier of a house of an annual value of eight pounds or less, he may between the thirtieth day of April and the thirty-first day of August in any year obtain without payment of duty a licence to brew a quantity not exceeding two bushels of malt, or the equivalent thereof, for his own use in the course of his employment on harvest work.
I move this Amendment in pursuance of a promise made to the hon. Member for Sudbury (Major Howard) in the course of the Committee stage, with the object of relieving a labourer brewing harvest beer for himself of payment of duty.

Mr. PRETYMAN: On behalf of the agriculturists in the Eastern Counties, I desire
to say that we very much appreciate this concession. It is not that there is very much effect on the revenue, but the privilege of brewing harvest beer for themselves is one which the agricultural labourers in the East of England have enjoyed for many generations, and they would have felt much hurt if they had been deprived of that privilege except on payment of duty.

Amendment agreed to.

Captain BENN: There is an Amendment on the. Paper standing in the name of myself and some hon. Friends which raises a point which was not discussed in Committee, namely, whether preference should be given to mandated territories other than those which are administered under the laws of the Government of a part of His Majesty's Dominions. That was never separately discussed during the Committee stage.

Mr. SPEAKER: I have looked it up, and find that it was very fully discussed. It was not raised as a separate issue, but it was very fully discussed on the 9th of July. I think if the hon. and gallant Gentleman will refresh his memory by looking at the OFFICIAL REPORT he will find that it was fully discussed.

Captain BENN: Not as a separate point. The general question of Preference to mandated territories was raised, but not the question stated in this Amendment.

Mr. SPEAKER: Surely!

Captain BENN: I think not.

CLAUSE 20.—(Relief in Respect of Houses Occupied by Ministers of Religion.)

Where a, clergyman or minister of any religious denomination occupies a dwelling house rent free by virtue of his office in such circumstances that the annual value of the house does not fall to be regarded as part of his income, he shall be entitled, on giving notice to the surveyor of taxes not later than the thirtieth day of September in any year, to require that the annual value of the house, after deducting there from the amount of any annual sum payable in respect of such house shall for all purposes of Income Tax for that year be treated as earned income of such clergyman or minister.

In this Section the expression "annual sum" has the same meaning as in Rule 4 (2) of No. VIII. of the rules applicable to Schedule A.

Mr. CHAMBERLAIN: I beg to move, after the word "year" ["not later than the Thirtieth day of September in any year"], to insert the words
or, where the occupation of such clergyman or minister commenced after the thirtieth day
of June, before the expiration of three months-after the date of the commencement of such occupation.
This provides that a clergyman, on catering a house or manse, may exercise his option within three months of the date of entry or occupation.

Amendment agreed to.

CLAUSE 24.—(Increase of Relief from, Income Tax in Respect of Wife.)

Fifty pounds shall be substituted for twenty-five pounds in Section thirteen of the Income Tax Act, 1918, as the amount upon which relief shall be granted in respect of a wife under that Section.

Mr. CHAMBERLAIN: I beg to move to leave out the words "in respect of a wife.'

Mr. ARNOLD: I do not know if I am in order, but the Chancellor of the Exchequer will be aware that in the Income Tax Act of last year abatement is given not only in respect of a wife, but also in respect of a wife or a female relative of a widower or of his deceased wife, and also in respect of a man's male or female relative whom he has maintained at his own expense and who is incapacitated by age or infirmity from maintaining himself or herself. From this Amendment and the next one which stands in the name of the right hon. Gentleman, I gather that he-is going to confine the abatement now to the first two of these three cases—that is to say, to a wife and to a female relative of a widower or of his deceased wife who has the care of her children, and that he does not propose to go further and give the abatement to the third case, namely, that of the relative who may be incapacitated by age or infirmity and is being maintained by the taxpayer. It seems to me. that there cannot be very many of these people and that the amount of money involved must be very small. But it would seem to be a real hardship that this increased abatement should not be given in those cases, and if the right hon. Gentleman can sec his way to make this further abatement I think it would meet a case of real hardship with practically no loss to the Exchequer.

Mr. CHAMBERLAIN: While we are all anxious to give encouragement to well doing I do not think the hon. Gentleman will press this further than I have already undertaken to go. I have undertaken to give effect to the Amendment which stood in the name of the right hon. Gentleman (Mr. Adamson), and I am not
sure that the hon. Member himself was not one of those who put it down, in the shape of a new Clause to extend the wife's allowances to £50. This is extending the £50 to the female relative as well as the wife. Then there is relief for the case of a female relative who acts as housekeeper and who is in charge of children. I have also undertaken to extend it to the female child who is in charge of a widower father, even though there are no children in the house. That is as far as I can go.

Amendment agreed to.

Mr. CHAMBERLAIN: I beg to move, after the word "Section," to insert the words
in respect of a wife or a female relative of a widower or of his deceased wife.

Amendment agreed to.

Mr. CHAMBERLAIN: I beg to move, at end, to insert:
(2) The relief conferred by the said Section thirteen, as amended by this Art, in respect of the female, relative of a widower, or of his deceased wife, who resiles with him for the purpose of having the charge and cave of any child of his, shall be extended so as to confer relief in respect of any such female relative who resides with him in the capacity of housekeeper, and not for the purpose of having the charge and care of any child of his:
provided that any relief in respect of a female relative under the said selection shall be conditional on proof being given that no other individual is entitled to relief from Income Tax in respect of the same person under the said Section thirteen, or under Section twelve of the same Act, or under this Act, or if any other individual is entitled to any such relief that the other individual has relinquished his claim thereto.
That meets the case which struck me as being a hard one, where there is an elderly man whose wife has died and whose children have passed out of the house, but who keeps one daughter at home, who otherwise would go away, in order to keep house for him. Then there is a necessary proviso to prevent two people getting relief in respect of the same person.

Mr. ADAMSON: As I gather its purport, the Amendment moved by the right hon. Gentleman docs not exactly meet the new Clause which was put down in the name of my hon. Friend and myself. I admit that the Chancellor has met one of the hard cases to which I referred specially when moving the new Clause,
the terms of which were not confined to relatives. As I gather the Chancellor's Amendment is confined to relatives.

Mr. CHAMBERLAIN: Yes, but so is the Amendment of my right hon. Friend, and if he intended to extend it further, the Clause was not properly drawn. It is confined to a relative, but is extended to a relative who is in the capacity of a housekeeper and not in the capacity of a guardian of children.

Mr. ADAMSON: I acknowledge the valuable concession which has been given, but it does not exactly meet the terms of our new Clause. There are cases which have come to my notice where a housekeeper who is not a relative is brought in to take charge of j a young family, in the case of a mother dying. There are those who have no children, and there are bachelors who have housekeepers, and this does not include them. It was only the other day that 1 had a letter from a minister bearing on that particular point. However, I take it that the Chancellor has gone as far as he is prepared to go at the moment. I gratefully acknowledge the concession which he has made, and do not press the matter any further.

Mr. ARNOLD: I am glad that the Chancellor of the Exchequer has made this concession, and, reinforcing what has been said by my right hon. Friend, may 1 say that there is another point. Even if the Chancellor of the Exchequer cannot see his way to go further this year, I should be very glad if he would consider before next year the case of the widower, who may have no children, who has to engage a housekeeper. If the wife were alive he would be entitled to an abatement of £50 whether there were children or not. He has to engage a housekeeper, pay her wages, and maintain her as well. Therefore I should have thought that the concession would have gone further and covered that case. If the Chancellor of the Exchequer will not do it this year I hope that he will consider it before next year.

Mr. NEAL: I would like to know whether the Chancellor of the Exchequer proposes to deal with this specific case. There is a man who is single and maintains his mother—

Mr. CHAMBERLAIN: That was dealt with in another Clause.

Mr. NEAL: There are no children. Perhaps I had better put the whole case. It is the case of a man who has an aged mother, and two sisters dependent upon him, but there are no children. I trust that this case is met by this or some other Amendment.

Mr. CHAMBERLAIN: The case of the only son of a widower was dealt with in the first Clause moved to-day. My right hon. Friend and the hon. Member (Mr. Arnold) know my difficulty in extending this Clause to meet the case which they have in mind. Take first of all the case put by the hon. Member, of a man whose house is managed by his wife and who engages a servant. That would mean that anybody might obtain relief in respect of his servant. But the other objection is the obvious objection that if a man is to be entitled to relief in respect of a housekeeper, whether she is a relative or not, it would cover a great many cases for which we have no sympathy. The matter was discussed in the Committee stage. The argument of my hon. Friend the Member for Wood Green (Mr. G. Locker-Lampson) was based on the fact that by aggregating the income of husband and wife you put a premium on that which was not marriage, and if you extend this to a housekeeper, who is not a relative, it would cover the case of a man and woman living together and not married. Nobody has ever made a suggestion by which that could be got over. That is what has deterred me from meeting the narrower case presented by the right hon. Gentleman which I should have been glad to meet.

Amendment agreed to.

CLAUSE 26.—(Amended Bates of Estate Duty.)

The scale set out in the Third Schedule to this Act shall, in the case of persons dying after the commencement of this Act, be substituted for the scale set out in the First Schedule to the Finance Act, 1914, as the scale of rates of Estate Duty:

Provided that where an interest in expectancy within the meaning of Part I. of the Finance Act, 1894, in any property has, before the thirtieth day of April, nineteen hundred and nineteen, been bonâ, fide sold or mortgaged for full consideration in money or money's worth, then no other duty on that property shall be payable by the purchaser or mortgagee when the interest falls into possession than would have been payable if this Part of this Act had not passed, and in the case of a mortgage any higher duty payable by the mortgagor shall rank as a charge subsequent to that of the mortgagee.

Brigadier-General CROFT: I beg to move, to leave out Clause 26.
The question of Death Duties was not raised on the Committee stage. It is one which, I think, in view of the burdens of the War, has been considered by this House without paying sufficient attention to its ultimate effect. I think the Chancellor of the Exchequer has in this particular matter violated almost every canon of finance. The new Death Duties are of such an alarming character in their increase that they seem to me to be, first of all, a blow at security, which is always bad. Having gone as far as the right hon. Gentleman has gone, it would be very difficult indeed for a Labour Chancellor of the Exchequer, sitting in his place, not to point back and say, "Here is the right hon. Gentleman, described by some great newspaper magnates as a reactionary, who yet has imposed Death Duties mounting up to 30 or 40 per cent." The consequence is that all through this country the saving classes of the community, whose cause I desire to champion, do not know where they are, and the result will be that our financial system will not be as restful as it used to be in days gone by. In the second place, they must be regarded as a great blow at thrift. The right hon. Gentleman, on other Clauses, told us from time to time the imperative necessity for every individual in this country saving and not spending his money. Thirdly, I think I can point out that it would be a blow to the ultimate strength of the nation as a whole. Fourthly, I think the right hon. Gentleman himself, a very few years ago, would have stigmatised these new increases as socialistic in the highest degree. They are achieving in a roundabout way the results of methods and proposals which hon. Gentlemen who sit behind me describe as a levy on capital. Fifthly, I say it is a sop to that extreme section of the community which believes that all wealth is bad, and it is an encouragement to them to think that the Government is leaning in that direction.
What will be the result of these new Death Duties? The man who happens to be a waster and a profligate and of no use to the country goes scot-free; ho does not come into the Chancellor's net. If a man happens to be one who all his life has saved his money and put it back into his industry or his land, then the Chancellor of the Exchequer, after taxing him 50 percent. on his income all his life, comes along on his death and, in the case of a very successful person, takes from 30 percent. and 40 percent. of his estate.
Let me give one brief instance. I happen to know the case of a man in Yorkshire who confessed, a year ago, that he was worth £1,100,000. He put all that money into his mills in Yorkshire. He pointed out to me that a very large proportion of that saving had gone into new factories and mills. He has two sons. When he dies the Chancellor of the Exchequer will seize something like £300,000 of the estate. The liquid capital in that business is not as much as £300,000, so it is evident that the two sons can carry on that business only if they are able to borrow a large sum of money for payment of the Death Duties. The result to the business must be disastrous. I suggest that the whole policy is very bad business. I am taking large figures, because they make the point clear. Take the case of an estate of £1,000,000 sterling. Such an estate pays £300,000. These large estates, which the Chancellor is penalising, are the very fortunes which, if the hen-roost were not robbed, would be yielding that great amount of revenue which he is only too pleased to take from such estates. Large estates are paying something like 50 percent. in Income Tax and Super-tax. Take the figure of £300,000 in the case of the man who dies worth £1,000,000, and at a moderate estimate allow a rate of interest of 6 per cent. It means that the loss of income to the Chancellor of the Exchequer from that confiscation would be £18,000 per annum. On the basis that 50 percent. would be paid in Income Tax and Super-tax on such a great fortune, the State would thus lose £9,000 a year, or in ten years, at compound interest, about £110,000. It is not necessary for me to enlarge on this argument in order to show that it will not be very long before the country will be actually poorer as a result of these raids, this taking of great blocks out of capital which is returning so much to the revenue at the moment. I think it must be regarded as a folly which in time will defeat its own object. It is also a very great encouragement, a dangerous encouragement, to those sections of the community which regard wealth as a crime. It is high time that we realised that the men who have saved largely are really the greatest benefactors this country has. It is no excuse, merely because we are suffering from the great difficulties of the War, that we should indulge in this kind of taxation, which no man could justify in peace time. Taxation is a very
delicate instrument, and once you appear to be unjust you defeat the object you desire to attain. People will disperse their estates. I wonder if that is to be to the advantage of the country in the long run?
I will give one more instance to show the extraordinary value of the wise man who saves his money and puts it back into his business. I know the case of a man who went into a small business and had £20,000 of capital. He developed a great business—it was quite a new business—and during the time he was engaged in it and up to the time of his death, he paid £790,000 in wages. If the right hon. Gentleman is going to continue this policy it can only have this effect. The tendency will be, in the first place, to disperse estates, and, in the second place, to avoid these Death Duties by starting companies in foreign countries in which men will get their children and grandchildren interested. I hope the right hon. Gentleman will reconsider the question. Since he-made his Budget speech we have heard that we are going to receive certain small indemnities, at any rate, sufficient to pay for the pensions in this country. Does not that put the right hon. Gentleman in a different position? If he insists on these Death Duties, which have passed the region of justice, I believe that in days to come he will find they will have disastrous effects on the commerce and industry of the country.

Mr. G. TERRELL: I beg to second the Amendment.
I think a great mistake is made in imagining that you can reach the employer or manufacturer by imposing these heavy taxes. In the case of a factory, what happens? It is not the owner of the factory who in the end is taxed; it is the goods. All the taxes are put on to the goods which are produced in that factory. So you start in a vicious circle, and you. get high cost of all commodities, which is the great trouble we have to face to-day. Income Tax, Excess Profits Tax, and these taxes ultimately find their way to the goods produced.

Sir F. BANBURY: My hon. friend left out one point, and that is that under this system the expenditure of the country is being defrayed out of the capital of the country. That is a very important point which hon. Members in the Labour party ought to consider. At a time when we desire all the capital we can get we are spending that capital in order to defray
our annual expenditure. What is wrong in the individual must be wrong in the State. My right hon. Friend and I twenty-six years ago fought these Death Duties to the best of our then ability. I have not changed my opinion, and I hope my right hon. Friend has not changed his.

Mr. CHAMBERLAIN: I am free to acknowledge that a politician who does not change his mind in twenty-six years would not really be a very useful Member of this House. Seriously, does my right hon. Friend think that he or I could very usefully repeat the argument or renew the attitude which we adopted twenty-six years ago when our Budget was about £100.000,000, in days like the present when we spend £1,000,000,000, and more than that? I am afraid those good days have gone never to return.

Sir F. BANBURY: That does not touch the principle. The argument in those days was that it was not right to take a man's capital and spend it as revenue, and that principle remains.

8.0 p.m.

Mr. CHAMBERLAIN: I doubt whether my right hon. Friend can find that argument in any speech of mine twenty-six years ago. It is very rash to say what is and what is not in a speech of twenty-six years ago, but I speak with some confidence on the point because I do not think I ever spoke on the Budget twenty-six years ago. I will, however, come to that argument later. The hon. Member for Chippenham (Mr. Terrell) carried his argument very much further. He said that all taxes were bad, because all taxes raise prices. Perhaps all taxes are bad. Perhaps it Would be a very good thing not to have them; but clearly we cannot do without them. As to my hon. and gallant Friend, the Mover of the Amendment, he made out a more serious case, as was his duty. I have had the advantage of having seen my hon. and gallant Friend's arguments in print in a newspaper, and that enables me more clearly to follow his calculations. They are curious. My hon. and gallant Friend says that I propose to derive from the increased Death Duties a sum of £10,000,000 which, he goes on to say, I might borrow. My hon. and gallant Friend is labouring under a serious illusion if he thinks that the State can borrow unlimited sums, even at 5 percent. The hon. and gallant Gentleman also stated in that article that the present taxation amounted to £10,000,000 on large estates, and when he says that if that capital were
left in the hands of the present owners it would produce £4,000,000, he estimates that all incomes are taxed at the highest rate.

Brigadier-General CROFT: I quite see the right hon. Gentleman's point, and that is why I based my argument entirely on the income arising from £300,000, which is confiscated.

Mr. CHAMBERLAIN: It would not be fair perhaps to press my hon. and gallant Friend unduly on the statement, but I assume that his calculations were accurately made out in his speech. in the first place, for the purposes of his argument, he assumes that in the case of the whole of the £10,000,000 taken in Death Duties if the income from that sum had passed to the heirs it would all be assessable to Income Tax at the highest rate. That does not follow. It does not all come from estates which are assessable at the highest rate of Income Tax. I am afraid that my hon. and gallant Friend's calculation is, even now, over sanguine. With regard to provision for the payment of Death Duties, if people have made provision on the old scale by insurance or putting sums aside and suddenly find themselves confronted with a new charge when they are advanced in years, that, of course, alters the position for thorn, and their calculations are upset. But then those people had an unrivalled opportunity of providing for their Death Duties within the last few weeks owing to the terms of the Loan, and I do not think they have a great deal to complain of now in that respect. I come to the point raised by my right hon. Friend the Member for the City and endorsed by the hon. and gallant Gentleman opposite, namely, that we are taking capital and treating it as income. I am not quite convinced by that argument, and in any case I do not think it has great force at the present moment. The total amount which we expect to receive from Death Duties is, I think, £40,000,000. That is a very big sum no doubt, and calculated as a charge on the property passing in any one year it is a very big sum, but that £40,000,000 is less than the sum we require for our Sinking Fund. Even if that sum be not devoted to the cancellation of debt, a sum equivalent will be so employed, and as long as we spend it in reduction of debt or whenever we spend on the reduction of debt as large a sum as we get from Death Duties, the argument used by the right hon. Member for
the City fails to have any force. My hon. and gallant Friend regards me as setting a very dangerous precedent, which will be quoted hereafter by some person, I suppose even more dangerous than myself. We cannot protect ourselves against that, and we can only do the best in the circumstances with which we are confronted. I do not think the proportion which I am taking in Death Duties is an undue proportion, and, as I ventured to say in my Budget Statement, I regard these duties as, in some sense, an insurance for the security of property.

Lord HUGH CECIL: I confess I think that the arguments addressed to the House by my hon. and gallant Friend (Brigadier-General Croft) go really to show that the Death Duties are a bad way of levying large sums from the subject, and that they are now obsolete since it has been found practicable to introduce a system of Super-tax. When these duties were first introduced it was the accepted doctrine that a Super-tax was impossible. It was supposed it could not be levied, and it was thought desirable to have some system by which taxation would fall more heavily on the more rich and less heavily on the less rich. Accordingly we adopted the system of Death Duties, but since the Super-tax has been found practicable it is the far better tax of the two. My right hon. Friend does not quite agree that you are levying on your capital, and necessarily that is a matter largely of contention. But it is quite plain if you levy so large a portion, whether at death or at any other time, that the person who comes next into possession of that capital cannot make good the loss, or will not make good the loss during his lifetime, that then your tax is gradually wasting away a portion of the capital, and that it is not taken, as it should be, out of the surplusage of the country. As a matter of fact, this tax is diminishing great landed estates, and they are a visible form of wealth. If a man succeeds to an estate, and owing to these duties cannot save in his lifetime, so that he dies as rich as his father, then it is quite plain that the country has consumed by taxation so much of that wealth as he has not restored. I should have thought that this tax was really obsolete since the Super-tax was invented, so far as income bearing property goes. You might have a Death Duty levied on non-income-bearing property, but I apprehend that that would
be a relatively small matter from the revenue point of view. The great mass of the property is income-bearing, and so far as taxing property goes you have solved the problem by the Super-tax. I cannot conceive what you want with Death Duties, and why you cannot tax very rich people on incomes instead of taxing them on the body of the property. I do suggest that this is a point worthy of further consideration. I think it unfair on the face of it that you should have a permanent tax which may be as much as 30 percent. or 40 percent. When you get to those figures you are approaching, if you have not passed, the boundary, which is so very undefinable, that distinguishes the confiscation of property from taxation. I think it is clear that you can carry taxation to such a point that you do really destroy the right of property altogether, and people who deny the right of property think that that is a wise method of procedure.
But the objection to it is that if you destroy property, even the property of the very limited class of very rich people, you unsettle the whole fabric of property, and nobody feels quite safe. You begin with the millionaire, you go down to the next richest man, and so on, downwards, the same argument being applied consecutively to each class of victims as they come in turn, and to own property merely means to be a sheep gathered in the flock of slaughter waiting the day of sacrifice. Therefore it really is dangerous to put on such high rates of taxation, and in my view it is immoral to carry taxation so high unless it can be shown to be a merely temporary purpose brought about by the War, because it may be said the War would have destroyed everything, and therefore you are entitled to ask for any sacrifice, however heavy. But Death Duties, I apprehend, are not levied for a temporary purpose. They are levied, if not permanently, at any rate for a long period of years, and in that case I think so large a proportion ought not to be taken. If our country differs advantageously from France, for example, in having local initiative, and the capacity for local leadership, that really arises from the fact of having many rich people among us. Nothing is more unsound than to suppose that a man of moderate wealth is more useful as a citizen than a man of great wealth, and I think experience shows the opposite to be the truth—that a very rich man is more useful to the com-
munity than a moderately rich man. I am considering whether you should tax the moderately rich or the very rich, and I am sure that a system of taxation that seeks to destroy the very rich man, the millionaire or the super-millionaire, is profoundly unwise. You destroy the individual initiative, which is such a great safeguard to liberty and against a wooden bureaucracy and looking to the State to do everything, and which really makes our local public life so entirely different from the local public life of France, for example, and I suppose many other countries; but as I have lived in France from a boy very considerably, and have observed the enormous contrast between the local life of France and the local life of England, I give that as an example. If you destroy that very good element you do an ill-service to the community. Therefore, I am sorry that Death Duties are persisted in, and that they should be raised to such figures as to represent an attack upon the very rich people, who are, I believe, a very valuable element in the community.

Mr. A. SHORT: The Noble Lord interests and charms the House with his academic speeches, but I think he fails at times to convince the House. I did not rise to reply to his speech, but rather to refer to the interesting speeches that were delivered in moving and seconding this Clause. It was very interesting for the House to learn from the hon. Member (Mr. G. Terrell), who is a supporter of Tariff Reform, that all taxes on commodities are paid by the consumer. That is an acknowledgment, I venture to think, which we find most interesting and a most remarkable admission, but I want to call attention to the extraordinary statement made by the hon. and gallant Member for Bournemouth (Brigadier-General Croft). This is the second time that this statement to which I am calling attention has been made in this House during discussions on the Budget. The hon. and gallant Member told us that if this taxation went on there would only be one thing to happen, and that would be that the capitalists, the wealthy people of this country, would take their capital abroad. This appears to me to be something in the nature of adoption, so far as the hon. and gallant Member is concerned, of the policy of direct action. When the miners of this country, for instance, withdraw their labour power,
creating some measure of chaos and anarchy in society and leading to enormous disturbance and to some suffering, then the hon. and gallant Member, this great Leader of the National party, immediately rises and condemns them wholesale, but for the employing classes, for the capitalists, for wealthy men, to take their capital abroad, leaving the people of this country to starve and to suffer in a state of unemployment, that is something which appeals to him and which he justifies. If the hon. and gallant Member represents the opinion of the employing class in this country—I hope he does not—it is a remarkable demonstration of their patriotism. We have just emerged from a terrific contest. Tommy Atkins has been facing unknown terrors, going over the top, facing hell for a bob a day—[An HON. MEMBERS: "So have his officers!"]—and so have his officers. He has been promised a new social order, and we are told that if this taxation is continued, taxation which is going to assist us to face our financial commitments and to reconstruct and rebuild the shattered fabric of society, if this continues we are told that the wealthy people of this country will take their capital abroad. I can only hope that the hon. and gallant Member does not represent the opinions even of the wealthy classes of this country, but I can only regard such a statement as a. justification and an encouragement of the policy of direct action in this country by those who represent labour and by those who, as a result of their labour, produce the wealth which hitherto has passed into the coffers of the people for whom the hon. and gallant Member appears to speak.

Brigadier-General CROFT: I will say one word in reply to the hon. Member who has just sat down. Hitherto the argument has always been advanced by the Labour party that it is desirable that capital should be invested abroad to every possible extent, and I am interested to hear that he is now converted and that he does not think it desirable. The Labour party always used to agree upon that policy in the past, and a very fundamental change has come about. I do not intend to press this Amendment to a Division. I can only say that I extremely regret that the Chancellor of the Exchequer is not able to make some concession on this matter.

Amendment, by leave, withdrawn.

Lord H. CECIL: I beg to move, at the end, to insert the words
Provided that the value of the estate referred to in the scale shall be the value of the property passing at the death of the deceased to any one person, and if an estate shall be divided and shall pass to more persons than one each part of the estate so passing shall for the purpose of fixing the rate of estate duty be deemed to be the whole estate of the deceased.
This is an Amendment intended to remove the principle of aggregation from the method of assessing Death Duties. As the law now stands, an estate is charged at a certain rate, and the rate is fixed in respect to the total value of the estate left by the testator. It seems to me that if you have graduation at all, and certainly if you have this heavy graduation, the rate ought to be fixed not on the property left by the testator, but on the property received by each heir. That is to say, if a man leaves £1,000,000 among five children, the reasonable thing is that each should pay on the scale of £200,000, instead of on the scale of £1,000,000. Take the case of two brothers, one with five children and the other with one child. The inequality of the present system will at once be seen. If each of them leaves £1,000,000, the five children receive £200.000 each and pay on the same scale as their cousin who receives £1,000,000. That seems to me plainly unjust. I know my hon. Friend will say that the tax is supposed to be levied on what the testator leaves. One might as well say that this House is erected on the theory that the world is flat, and not that the world is round. You may set up a theory, but it does not alter the fact. The fact is that the tax is levied on the heir, and not on the testator. It is paid by the heir, and the heir feels the weight of it. That is realised in the fact that you have graduation at all. If the tax were levied, not on a person but on a body, graduation would be an absurdity. Sacrifice can only, be felt by a person, and the only person, therefore, who is a proper subject for graduation is the heir. If you have graduation, which I think is a reasonable and just principle, in levying the tax. then you ought to make the graduation strictly conform with the capacity of the taxpayer to pay the tax. and I suggest that the fair and equitable thing is that the heir should pay on what he receives.
The scale is admitted by the Government to be exceedingly heavy. I say it is very unjust and unreasonable that when you are levying taxes of such extreme weight you should levy them on people
who do not really receive the money to the amount on which they are assessed. The case, of course, may be very hard indeed on persons who are left a comparatively small portion of a large estate, and the only answer made to that is that the testator can free a small portion by throwing the Estate Duty upon the main residuary heir, which is very unfair to him, as he is already taxed up to the hilt on the theory that he receives the whole property. If a portion is given to somebody else, it is very unfair he should be taxed on that which he does not receive. You cannot make it just in any way unless you adopt my Amendment, and then the tax is really levied on the person at the scale for the amount received by the person who pays the tax. The graduation really corresponds to the capacity of the taxpayer to pay the tax. I believe if the Government accepted the Amendment they would lose a great deal of revenue but gain credit for a great deal of justice.

Brigadier-General CROFT: I should like to give one instance in order to try to bring this matter home. I am perfectly certain that some day the hon. Gentleman who interrupted me just Low will like to see this principle of Death Duties extended to property of all kinds. Supposing by his wisdom and thrift he manages to save, let us say. £500 during his life. I think he must see at once, and I think everybody must realise, that it would be far more equitable, if he had several children to whom he left that fortune, that they should only be taxed according to the amount of money which each was left rather than under the present system. Clearly, if a man, the only child, inherits a fortune, there is far less reason why he should be permitted to retain the whole, once you admit the principle of Death Duties, than in the case of many children. I hope the hon. Gentleman has been instructed by the Chancellor of the Exchequer to accept this Amendment, because it seems to be eminently fair and wise, and one which would very largely meet many of the hard cases which I indicated on the last Amendment

Mr. BALDWIN: I do not think I need detain the House many minutes on this Amendment. I will try to put before the House what my own views are on this subject. I am not a trained lawyer, and I may not be precise in my definition. I am not a dialectician; perhaps my arguments
will be futile. After all, these are Death Duties, and the principle of Death Duties that has been accepted since their inception has been the principle of aggregation. My Noble Friend wishes to convert the Death Duties into acquisition duties to be paid by the living on such a scale as may be graduated according to the income of the living person. The fact is that in Death Duties—I will put it in my own plain language—we are really taxing the corpse. It is the last service the deceased man pays to his country to have taken from the estate he has saved up in his life whatever the Government of his country thinks that estate ought to contribute, and what is left is divided amongst those who inherit.

Lord H. CECIL: How can a corpse bear a sacrifice; and, if so, what becomes of the principle of graduation 1

Mr. BALDWIN: That is vicarious, I admit I do not think my contention. is wrong, that all those who inherit are in a very fortunate position, and, as far as the practical part of this question goes, I am sure my Noble Friend, and my hon. and gallant Friend who seconded the Amendment would not expect, even if such a change were thought desirable, and were sanctioned by the House, that practicable effect could be given to it at the present stage of our proceedings. It is impossible, I admit, to make even the roughest estimate of what the loss to the Exchequer would be of assessing on any other principle than that of aggregation; but I do not think it would be an unfair assumption that half the Death Duties would disappear, and if half the Death Duties disappeared, or anything like that, the problem would immediately arise, From what source would that enormous amount of income to the country be made good? The matter really is a very simple one of principle between us. This principle of aggregation was part of the original form of the Death Duties. An inquiry was held twenty years ago by a very strong Committee, consisting of Lord Haldane, Lord Finlay, Sir Henry Primrose and the right hon. Member for Chelmsford. They were to investigate the incidence, and see if they could suggest any means by which, without surrendering the principle of aggregation, they might lighten the incidence, and they found themselves unable to make any practical suggestions to that end which would have made the incidence
lighter to the beneficiaries. In those circumstances, my instructions are not to accept this Amendment, and, with very great regret, I must decline to agree to the Amendment.

Lord H. CECIL: I will not put the House to further trouble in respect to this Amendment. I desired to point out how unjust the Death Duties really are, and, if possible, to induce the Government to appoint a Committee to inquire into them, and see whether they really ought to be an important part of our system of accumulating revenue as they now are; and, if so, whether the methods could not be improved upon.

Amendment, by leave, withdrawn.

CLAUSE 27.—(Interest on Death Duties.)

Section eighteen of the Finance Act, 1896 (which determines the rate of interest on death duties) shall, in its application to interest accruing due after the commencement of this Act, have effect as though five percent. were substituted for three per cent. as the rate of interest per annum.

Lieut.-Colonel ROYDS: I beg to move, after the word "due" ["to interest accruing due after"], to insert the words
In respect of the estate of persons dying.
The effect of this Amendment, if adopted, would limit the operations of this Clause to the estates of persons dying after the passing of the Act. Hitherto there has been no change, or, rather, no increase in the rate of interest payable on instalments. Here, for the first time, this Clause deals with the estates of persons already dead, and increases the rate of interest on unpaid instalments of Estate and Succession Duty from 3 percent. to 5 percent. without any deduction for Income Tax, which may be now at the rate of 6s. in the £. This is the first time there has been any attempt or suggestion that the rate of duty shall be altered, that the Death Duties shall be increased after the death of the testator. It is rather an unfortunate time to introduce a change of this sort, because it is clear if executors are paying Estate and Succession Duty by instalments, there is a desire to retain the estate. This Clause only applies to real estate, and the instalments of Estate Duty and Succession Duty on real estate. This increased rate on unpaid instalments is made just at the time when it is impossible to raise the rents from which the income is derived, for under the Rents Restriction Act little or no increase may be made to meet this increased rate. We have
only just emerged from the greatest war in history. A very large number of the deaths connected with the estates in respect of which this increased duty is payable are deaths which have occurred directly or indirectly in consequence of the War. The duties on the estates of persons so dying have been relieved to some extent already, but what we have given with one hand we are in part taking away with the other by this Clause.
It is most unfortunate that any attempt should be made in the way of alteration now inregard to Death Duties in the case of persons who have died before the passing of the Act. I hope very much the Chancellor of the Exchequer will see his way to adopt this Amendment. I would remind him that a very large proportion of the estates of persons who die leaving only small fortunes consist of land or house property. The average property of the person dying and leaving property worth £1,000 or under, to the extent of 40 percent. or 50 per cent., is either land or cottage property. Therefore, this is not the case of putting an imposition only on persons who have large estates. It is concerned very largely with small estates, and just the class of property to which the Rent Restrictions Act applies.

Mr. A. SHAW: I beg to second the Amendment.
I can only add to what my hon. and gallant Friend has said this additional consideration: that I believe it is one of the principles upon which Death Duties are founded that the testator should be given some opportunity of making provision for their payment. If necessary, we should give such an opportunity in the case of the estates of persons already dead. I trust the Chancellor will accede to the very reasonable request of my hon. and gallant Friend.

Mr. BALDWIN: My hon. and gallant Friend who moved this Amendment has, I think, been in communication on the subject with the Chancellor of the Exchequer. I do not think that any hope was held out to him that this Amendment would be accepted. We have not yet, I think, fixed finally the rate of interest. There are Amendments dealing with that subject later, but the principle seems to me to be this: The rate of 3 percent., which was fixed both for the payments by executors and payments to executors, was fixed some years ago, when money was cheap,
at the very low rate of 3 percent. The benefit of that 3 percent. has been continued long after the rates for money have risen considerably beyond that figure. It was felt, and I think rightly, that the time had come when the rate to be put into the Finance Act should be more in accord with that ruling in the market. I do not think anyone would contend that even 5 per cent. is an excessive rate, having regard to the value of money to-day.
There is a point which my hon. and gallant Friend raised, and I want to try, having raised it, to say something on it. It may be that at first sight it seems a hardship that all classes of estates should be liable to the increased rate; but, after all, the increased rate is not being made retrospective. It falls from the same date on all estates, and if there be estates which are still in process of paying, they have had the advantage of 3 percent. rate for a longer time. They are on the same footing now with everyone else in being asked to pay the rate more in accordance with the value of money. I do not think it would be practicable or just to make-any exceptions in this case, but that all estates that are paying duty should be put on the same footing. It would have-been quite possible and not unreasonable if my right hon. Friend had suggested an even higher rate than he has. He felt that the advance proposed was not an unfair one in all the circumstances. I hope with this brief explanation the House will negative the Amendment.

Amendment negatived.

CLAUSE 21.—(Interest on Death Duties.)

Section eighteen of the Finance Act, 1896 (which determines the rate of interest on death duties) shall, in its application to interest accruing due after the commencement of this Act, have effect as though five percent. were substituted for three percent as the rate of interest per annum.

Amendment made: To leave out the word "five," and insert instead thereof the word "four." — [Mr. Baldwin,]

CLAUSE 29.—(Continuation of Excess Profits Duty.)

(2) Section thirty-eight of the principal Act shall, as respects excess profits arising in any accounting period commencing on or after the first day of January, nineteen hundred and nineteen, have effect as if forty percent. of the excess were substituted as the rate of duty for eighty percent. of the excess or, in the case of an accounting period which commenced before that date but ends after that date, as if forty percent. were substituted for eighty percent.
as respects so much of the excess as may be apportioned under this Part of this Act to the part commencing on that date.

In calculating any repayment or set off under Sub-section (3) of Section thirty-eight of the principal Act any amount to be repaid or set off on account of a deficiency or loss arising in any accounting period commencing on or after the first day of January, nineteen hundred and nineteen, or, in the case of an accounting period which has commenced before that date but ends after that date, on account of so much of the deficiency or loss as may be apportioned under this Part of this Act to the part commencing on that date, shall be calculated by reference to duty at the rate of forty percent.

Mr. G. TERRELL: I beg to move, at the end of Sub-section (2), to add the words
Except that no apportionment shall be made where it is proved that at the end of the last accounting period stock was taken at cost or market price and consequent on the cessation of hostilities the market price fell prior to the first day of January, nineteen hundred and nineteen, when the repayment or set off arising there from shall be calculated at the late of eighty percent. even though the accounting period ends after the thirty-first day of December, nineteen hundred and eighteen.
There is one point in regard to this Amendment, that it is quite possible my hon. Friend can set my mind at ease and make the position clear. This Amendment deals with cases where there has been a loss on the stocks before the 31st of December, and by this Amendment we seek to get the allowance of extra profits at the rate of 80 percent., and not 40 percent., which comes into operation after the 31st of December. Where the loss has clearly occurred in the 80 percent. period, we suggest that the allowance should be at the 80 percent., and not 40 per cent. When the matter was before the House the Chancellor of the Exchequer stated that representatives of the various industries would be allowed to confer with the Inland Revenue authorities, and he said the matter was difficult and technical, and he hoped the Committee would not press him on that point. The difficulty is to establish that the loss occurred before the 31st of December, but if it can be clearly established I do ask my hon. Friend to agree that the allowance should be at the rate of 80 percent., and not 40 percent. One word will settle the point, and it is not necessary for me to press the House further.

Sir STUART COATS: I beg to second the Amendment.

Mr. BALDWIN: I quite agree this is a very technical subject, but I will be as brief as I can in stating why we cannot accept this Amendment. My hon. Friend did not give us any indication of the evi-
dence he had that there had been any particular shrinkage in stocks at the time named. It may be that in individual cases there has been a drop in values that can be traced to the time of the Armistice, or it may have occurred between that date and the end of the year. I have had no evidence of it, and my hon. Friend says it would be difficult to ascertain the facts. I submit that it would not only be difficulty but it would be absolutely impossible. It would mean, first of all, that the businesses whose accounts you were investigating must have taken stock on Armistice Day, and I do not think many businesses in this country did that. If that process had not been undertaken, it would be quite impossible to get an accurate estimate of the amount of stock on which depreciation had occurred.
Then there is another point. In the accounts of a year, or whatever period may have been adopted for any purpose of accurate accounting, you could only take into consideration the stock that stood in the books of that business or company at the day of the last accounting period, and if this Clause had been got rid of and stocks had been acquired subsequently which suffered this unparalleled depreciation on Armistice Day there would be no means of tracing them. I have every sympathy with my hon. Friend and anybody else who gets into trouble over his stocks, for they are, indeed, troublesome things. Gladly as I would meet this point, I cannot do so on this occasion, because I believe the proposal to be entirely impracticable even if we were shown that there was any need for special consideration to be given to the particular point which the hon. Member has raised.

Mr. TERRELL: Does the hon. Gentleman mean to go back on what the Chancellor of the Exchequer stated on the Committee stage, that there would be some further conference on this subject, and is he not now going back absolutely upon what the Chancellor of the Exchequer promised?

Mr. BALDWIN: I never go back on the right hon. Gentleman's promises. I did not hear the promise, but, assuming he made such a promise, and it is a fact, the question of accepting the Amendment has nothing to do with it. If the Chancellor of the Exchequer gave an undertaking of that nature, I have no doubt he will keep his promise.

Amendment negatived.

The following Amendment stood on the Paper in the name of Captain W. BENN:

In the Second Schedule [Preferential Rates], to leave out the words


Articles chargeable with the new Import Duties imposed by s. 12 of the Finance (No. 2) Act, 1915
Two-thirds of the full rate.

Captain BENN: During the course of the Debate on this Bill, the period over which the new Import Duties have been imposed has been changed by an Amendment. As this Amendment raises the question of the application of the principle of Preference to these duties, am I not in order in moving my Amendment?

Mr. DEPUTY-SPEAKER (Mr. Whitley): We have already come to a decision on this point.

Motion made, and Question proposed,
That the Bill be now read the third time.

Sir J. WALTON: I desire again to call attention to the inadequate provision by the Government in the Finance Bill for the real financial requirements of the year 1919 –20, and to their neglect to reduce expenditure by insisting on rigid economy in all the great spending Departments of the State. Perhaps I may be allowed to say what are the real financial requirements of the year and the provision that the Government have made to meet them in the Finance Bill. The Government's Estimate for 1919 –20, as contained in the final balance-sheet in the White Paper, is £1,435,000,000, but that was only arrived at after Appropriations-in-Aid to the, amount of £254,000,000 had been credited to the different Departments. That £254,000,000 was derived from the sale of war material, which was really the realisation of capital expenditure in previous years and not in the year 1919 –20. I submit that these Appropriations-in-Aid ought not to have been deducted from the expenditure of 1919 –20, but ought rather to have been applied in reduction of the floating dept up to 31st March last. If that sum is added to the expenditure of the year, the total is £1,689,000,000. The Government, on the other hand, estimate the revenue at £1,201,000,000. There, again, they include a sum of £200,000,000 that has been derived by the sale of war materials In the year 1919 –20. Surely the sale of war materials bought by expenditure in previous years is not revenue in the proper sense for the year 1919 –20, and that along with the - £254,000.000 previously drawn from the same source should have
been properly applied to the reduction of floating debt. We do not stop at an expenditure of £1,689,000,000, because already, though the Budget was not introduced till the end of April, we have had a Supplemental Estimate of £26,400,000 for coal.

Mr. DEPUTY-SPEAKER: This is not the occasion for discussing that subject. We are only concerned with the taxes that the Finance Bill raises. The discussion which the hon. Member is now raising is a matter for the Committee of Supply.

9.0 p.m.

Sir J. WALTON: Am I not entitled to draw attention, for instance, to the Supplemental Estimate of £75,000,000 introduced on the 3rd June, in addition to the Estimates on Budget day, increasing as it does the expenditure of the year 1919–20, and necessitating, as it naturally must, the provision of greater revenue?

Mr. DEPUTY-SPEAKER: That would come up, of course, in Supply on the Estimate to which the hon. Member refers. Of course, he is entitled to say that the present taxes are inadequate, but he is not. entitled to review other matters which will come before the House later.

Sir J. WALTON: The only reason why I say that the taxes are inadequate was because I was going to show the actual deficit for the year 1919–20, as at present disclosed by the Supplemental Estimates, by the falling exchange with America, for instance, which increases our obligations to the United States by £100,000,000, is nearly £900,000,000, and not £333,000,000. It was on that ground that I was going to urge that the revenue provided was inadequate to meet the financial requirements of the year. Perhaps I may be in order in congratulating the Chancellor of the Exchequer on the success of the Victory Loan to reduce the floating debt. Everyone rejoiced in the fact that £539,000,000 were contributed, including Treasury Bills and diversions, and that that included £450,000,000 of new money. One singular tiling in connection with the Loan was that the applications for Funding Loan were equally as great as for Victory Loan. That would seem to indicate that the premium offered by the drawing system under which certain people would receive £100 for £85 hardly drew that inflow of money from the general body of working people in the country that we have been told premium bonds would secure. A disap-
pointing feature of the Loan is the fact that the Post Office amount was only £20,000,000. The Chancellor of the Exchequer laid great stress on the fact that Victory Bonds costing £85 could be used to discharge Death Duties to the extent of £100, and yet the singular fact is that the applications for these Victory Bonds were only sufficient to cover the Death Duty privilege of £40,000,000 a year for eight years, because the Victory Bonds, including £64,000,000 of diversion, were only taken up to the extent of £329,000,000. My contention is that inadequate revenue is being raised to meet our enormous expenditure. We rejoiced over the Victory Loan, but what is our position to-day? We raised so much by taxation, but what have we to-day in the way of short-dated obligations still to be met which is not met by long-dated loans or by revenue raised by taxation. On the 19th July Treasury Bills were still outstanding to the tune of £670,000,000.

Mr. DEPUTY-SPEAKER: This really is not the occasion for this discussion. It is not relevant to the Third Reading of the Finance Bill.

Sir J. WALTON: I apologise. It is entirely by inadvertence that I have transgressed, but I thought I was entitled to refer to the huge amount of short-dated obligations still existing to-day after the Victory Loan has been got in, and after the revenue by taxation had been provided for. It really places the country in a very serious financial position, and will necessitate two further Loans to clear off our short-dated obligations on the 31st of March next.

Mr. DEPUTY-SPEAKER: There will be mother occasion in a very few days which will be quite appropriate.

Sir J. WALTON: I am glad to be corrected. I assure you, Sir, I had no intention of transgressing the proper limits of debate on the Third Reading of the Finance Bill, but may I ask whether I am entitled to refer to the question of subsidies which have grown so enormously recently?

Mr. DEPUTY-SPEAKER: Not at all on this occasion. That will come up on a proper occasion. We are only dealing now with what is contained in this Bill.

Sir J. WALTON: May I refer to the question of exchange? May I deal with currency matters now?

Mr. DEPUTY-SPEAKER: No.

Sir J. WALTON: Certainly, I am most unfortunate. Having been a Member of the House for twenty-two years I suppose I really ought to have known better. 1 ought to have been aware that so many subjects are out of place on the Third Reading of the Finance Bill. This will be my last inquiry. Am I in order in considering the additions we are going to have to pay on our imported food supplies?

Mr. DEPUTY-SPEAKER: That is not a subject contained in the Bill. The question is, that the Bill be read the third time, and the matters discussed here can only be matters contained in the Bill. These other questions are all questions which will probably come up on the Appropriation Bill.

Sir J. WALTON: Then I will reserve my observations on them until we have the Appropriation Bill before us. But I do hope the Government will realise, as they have never done before, the necessity for rigid economy not only on the part of the Government but also by the nation, and the fact that increased industry and increased production in all trades and industries, and not merely the coal mines, constitute the only way, in my judgment, of saving our present serious situation and preventing national bankruptcy.

Captain W. BENN: I beg to move, to leave out from the word "That" to the end of the Question, and to add instead thereof the words
this House declines to give a Third Heading to a Bill which for the first time introduces Protection into the fiscal system of this country and initiates a system of Colonial Preference which must ultimately lead to the taxation of imports of food and raw material.
I hope I may succeed in keeping more closely within the rules of debate than the hon. Gentleman who last spoke. I rise to take the somewhat unusual course of moving a reasoned Amendment on which those Friends who are associated with me intend to divide the House. I make no apology for taking a course which is not usual on the Finance Bill, because this Finance Bill is quite unusual, and because, also, the Government themselves, of their own motion earlier in the day, accepted a new precedent for peace-time in taking two stages of an important Finance Kill during one sitting of the House. I will deal with the points of my Amendment in the order in which they appear in it. First, there is the element of
Protection which appears for the first time in a Budget proposed by a Chancellor of the Exchequer in this House. The element of Protection is suggested in many Clauses, but there is one case of direct Protection. I refer, of course, to the fact that the Excise Duty on saccharine has been increased without any corresponding reduction of the Customs Duty. That is a small thing. But the Chancellor of the Exchequer will remember the case of stripped tobacco. When this was a Free Trade country the Budget was actually amended to get rid of a protective element which had been introduced in it. As regards saccharine, the proposal of the Chancellor of the Exchequer is purely protective, because we discovered by the Board of Trade Returns that there is no saccharine produced in the Colonies nor is there any hope of it being produced there. Therefore, what is known as the Excise rebate—merely giving the home manufacturer what would be given to the Colonial manufacturer by Preference—does not apply in the case of saccharine. Here we have an absolute case not denied even by the Chancellor of the Exchequer, where, for the first time in a Clause in the Budget, there is definite protection of home-manufactured saccharine under the protection of a tariff wall.
Some rather extraordinary defences have been put forward for this proposal. One hon. Member said that, inasmuch as it was the Germans who used to produce the saccharine, it is a very good thing to give Protection. I do not follow the logic that if the Germans are enabled to produce that which other countries produce we are justified in damaging "our own industry. It may be a small matter, but still it is important because several industries in this country depend upon saccharine as a constituent element of their manufacture—mineral water manufacturers, confectioners, and so on. This is a moment when we should stimulate our exports and do everything in our power to get other trades going in order that we may make up the. colossal losses of the War. But the right hon. Gentleman in introducing his protective system is raising prices. This is a complete case of Protecton. It has nothing to do with the Coalition agreement. It has nothing to do with the Joint manifesto. But that, of course, is not the main burden of our complaint. What we mainly complain about is the continuance in peace time of
a series of Import Duties imposed by Mr. McKenna in 1915 for certain specific war purposes—duties on motor cars, musical instruments, cinematograph films, clocks and watches. I do not wish to reiterate all that has been said on former occasions as to the reason why these duties were imposed. I will, however, refer the House again to a statement made by the Leader of the House relating to these matters when the duties were proposed. At that time the House of Commons was certainly a Free Trade House, and it looked with some suspicion on these proposals, fearing, very likely, that the counsels of Protection would prevail in the Coalition. In order to allay those suspicions the Leader of the House made many statements, but I will quote only one:
The only ground on which I think I can see any question of opposition to the proposals from the point of view of fiscal controversy is the idea that they will lead to something else. But duties of this kind would never be continued under any circumstances when the War is over.
That is as specific, clear and definite a statement as any man could possibly make. Yet we find that these duties are to be continued after the War is over, and with the assent and support of the right hon. Gentleman who made that statement and his colleagues in the Government They are continued also with the support of some hon. Members whose minds seem to have been somewhat changed by the election last December, although they still protest that their belief in Free Trade is as strong as ever It was. It has been repeatedly asked whether it would not be possible for the Financial Secretary to induce my right hon. Friend (Sir A. Mond) to present an appearance in our Debates. It is not without a certain sense of sadness that we shall part with this Bill without having induced him to give us the benefit of his very cogent powers of argument. When Mr. McKenna proposed these duties my right hon. Friend used these words:
The articles are ridiculous, the results are absurd, and the proposal will not achieve what is wanted.
If my right hon. Friend thought that in 1915, it seems to be very lamentable that his almost too close attention to his official duties should stand in the way of casual attendance at our Debates, when he might have explained what has caused him to alter his opinion. These duties have been defended by the Government on the ground that the reasons which caused their imposition still persist. It is said they were imposed to check expenditure,
to correct the exchanges and to minimise tonnage, and the reasons which were given in time of war are good in these times of peace. Therefore, yet a little while we shall let them stand—a year more. My hon. and learned Friend (Sir R. Adkins) showed a very keen desire that the duties should be permitted for a short time longer, and I think he was very pleased because he obtained from the Chancellor of the Exchequer an alteration in the date at which these duties should cease to be imposed. The hon. and learned Gentleman, perhaps with the keenness of a convert, defends these duties to-day with a passion which he never exhibited when they were first imposed by Mr. McKenna.

Sir R. ADKINS: They did not then meet with the opposition of my hon. and gallant Friend.

Captain BENN: I am very gratified that my hon. and learned Friend should make so complimentary a remark, but it does not affect this argument, that then when he was perhaps a freer agent he opposed the duties in his speeches. He did not appear in the Lobby as supporting them. Now, when the reasons must be less strong than they were during the War, he defends these duties, and I have not the least doubt will oppose my Motion. In regard to these import Duties we should consider some things which have emerged in our Debates. The duties on motor-cars, for example, are defended because it is said—this is one of the grounds—if people want to buy an American motor-car they should pay more for it. The hon. and gallant Gentleman, who protests that he is as strong a Free Trader as he ever was, and perhaps he is, used that argument, and when I pointed out that he was conceding the very point which Protectionists never will concede, namely, that the consumer pays the duty, he said, "Yes, of course, he does, and it is a good thing too. If he wants to import an expensive motor car he ought to pay for it." This concession is worth noting, and no doubt will be remembered when we discuss the more full-blooded Protectionist Budget which, I 'have no doubt, will follow in years to come.
I want to speak of another reason which is always alleged in defence of the Import Duties, and that is the correction of the exchanges. This is a deep and difficult subject, but we have never had the advantage, either from the Chancellor of the
Exchequer or the President of the Board of Trade, of a really clear statement of what the Government policy is in the matter of this correction of the exchanges. It is half opening the box. The box is kept locked. When anyone asks, "Why are you doing this?" the answer varies. Sometimes the Parliamentary Secretary answers and sometimes the President of the Board of Trade. One day the answer is, "It is to shield our industries against competition until they get going after the War." The next day the answer is, "If you will look at the exchanges you will see the necessity for something of the kind." Far be it from me to attempt to explore fully this very deep and difficult question of the exchanges, but I think we are entitled, if we do not pretend to understand the thing fully, to ask the Chancellor of the Exchequer to explain what he means by it, because we are only critics, and he is a constructor, and he must know and understand the principles on which he is acting. There are two sides to this policy. There is the Chancellor of the Exchequer, who imposes a tariff in order to correct the exchange, and there is the President of the Board of Trade, who issues or refuses to issue a licence, also in order to correct the exchange. Here is a curious thing. The exchange with America is adverse. We want to sell to America. We do not want to import. But the exchange with Franco is favourable. Unless we can get exports to France, moreover, we shall never be able to stimulate the flow of exports and get our trade going as it should. But the Chancellor of the Exchequer, by the same instrument with which he is checking imports from America, is checking exports to France. The same system operates in both cases. When you ask him "is it possible so to adjust your instrument that it only operates against the country with which the exchange is adverse," he says, "Of course it is not. That is against the law of the land." But if you can only have a device which operates all round and not merely in the direction in which it is needed, surely it is a very dangerous device to employ to attempt to correct the exchanges. I think we shall all agree that what is required is an increase of our exports. We must have it. The Chancellor of the Exchequer, or the President of the Board of Trade much more so says, "I will take charge of British trade. I will watch what is required for export, and I will stop what is not required for export and I will admit what is required, and under my tutelage British trade will
revive." If he were omniscient it might be so, but no Government is omniscient. There are half a dozen Departments unrelated, with no Cabinet co-ordination, all attempting to benefit British trade, or the particular corner of it which they see. So we find that the President of the Board of Trade, with the same benevolent object as the Chancellor of the Exchequer, is doing all sorts of things which are really going to check our exports and make the renascence of British trade impossible.
The Lord Privy Seal said, in answer to a question put by me, that nothing we were doing to-day would compromise the future policy of the Government. I venture to think that that is not so. We are to-day passing a Bill which commits us to protective duties and to Preference. We have the Board of Trade operating in a way which is setting up shelters for. various trades and industries, so that when the 1st September comes—I think that is the date—and the box is opened, we shall find that, whatever is in the box, we are committed in certain directions already by the action that is being taken. I need only point out, for instance, that the import of agricultural machinery is prohibited except by licence, and if anyone takes the trouble to read the "Board of Trade Gazette" Supplement he will be able to find half-a-dozen things which may appear to one manufacturer as manufactured products, but which other manufacturers will tell you are essential elements in their own manufacture. Consequently the checking of the import of such goods is merely discouraging and destroying our export trade. That is all I will say on the question of these Import Duties and their effect on the exchange. However partial our view may be, we are entitled at least to ask that the Chancellor of the Exchequer, when he replies in this Debate, shall lay before us quite clearly what is the Government policy and how it is related between the Exchequer and the Board of Trade in correcting the exchanges by means of these somewhat out of-date devices.
I will make just one further allusion to these Import Duties. My hon. and learned Friend the Member for Middleton (Sir R. Adkins) and his associates were proud of the fact that they had got the date of the operation of these duties altered, so that, instead of falling to be imposed during the whole of the fiscal year, they would be terminated, I think, on the 1st May next year. The
first thing I would point out to my hon. and learned Friend is that long before those duties fall not to be imposed, long before they lapse, the Chancellor of. the Exchequer may have brought in another Budget, in which case my hon. and learned Friend's victory is nil, because the Chancellor, if he has the power and can get support in this House, will merely put in a Clause continuing the duties as from the 1st May. If it is true, as my hon. and learned Friend no doubt thinks that by any Amendment which he has persuaded the Government to adopt these duties are definitely stamped as a temporary part of our machinery, as a thing that will be discarded immediately the conditions of war have passed away, I do say that the Government have no right to use those temporary duties as an opportunity for a preferential rate. Surely nothing could be more cruel to the Colonial manufacturers than to give them a preference on certain duties which, by the determination of the House and the Government, are doomed to be withdrawn after a few months. I shall have something to say about Preference in a, moment, but I think that surely that would be the negation of the spiritual unity of which the Chancellor of the Exchequer spoke—namely, to hold out a hope only to disappoint it when it became valid. I want to pass for a moment to this question of Preference. I will not go over again what is our view as to the real bond of union in the Empire. We hold, of course, that to assume this cash nexus is really to misunderstand the whole of the spirit of unity in the Empire. But inasmuch as it is an advantage to some people to have the tariff adjusted in their favour, we think that these duties, instead of creating a good feeling, will be much more likely to create irritation by reason of their unequal incidence. I have quotations here, for example, from various Canadian papers, which point out that the Preference is of very small value indeed. The "Manitoba. Free Press" says:
Preference has no direct interest for Canada,
and it goes on to elaborate that point. The "Montreal Gazette" says:
Many of the million who volunteered for the defence of the Empire did not think about tariffs when making up their minds where then duty lay. They will not worry about it if the Parliament of the United Kingdom, in view of the great financial needs which it has to provide for, holds that the time is not ripe for the-revolutionary policy submitted.
That is not the opinion of hide-bound free traders in this country, but the opinion expressed by responsible Canadian organs. So also may Australian opinion be found supporting the same view, and, moreover. Australia determining that she would become as far as possible closed in for manufacturing her own raw materials. We think that what will happen will be that as soon as these Preferences get into operation other Preferences will be asked for. Those Preferences we shall not be able to grant—at any rate, free traders will not; and the Government will not be able to grant them, unless indeed, they impose a tax on food and raw material. And the fact that you have conceded the Preference, and yet are bound to deny any tariff on the products of one of the countries competing with the products of the Colonies, will simply result in irritation, and elements leading to dissolution.
I want to speak at this moment of the effect of this Preference on foreign countries. When we say that it irritates foreign countries when we put hostile rates against them as compared with the products of the Dominions, we are always told that we are entitled to treat the members of our own family better than strangers. We do not deny that we have a much warmer feeling for the Dominions than for any foreign country, but we are anxious to avoid causes of offence with any country, and we think that this moment, when what we are seeking is friendship with all, is an unfortunate moment to select to impose a preferential rate against those who have been, and still are, allied with us. An hon. and gallant Friend of mine made great play with some references that I made in a previous discussion in regard to China. He scoffed at the idea. He seemed to think it was a. really humorous suggestion that we should consider the opinion of China. I venture to think that that is a very short-sighted view. I should be out of order if I dealt fully with the effect of the Peace Treaty on China, but I think it is a very serious thing that 400,000,000 of peace-loving people, who steadily refused for centuries to arm, who submitted without reply to robbery after robbery by every country in Europe—I think it is a very unfortunate thing that, whether in the Peace Treaty or in our tariffs, we should cause them to look to other things than the justice of their cause for self-defence. I venture to say that, although perhaps it may not be
in our time, the time will come when the movement which already exists in China in the direction of relying upon armed force for her defence will result in effects which will be lamentable for Western civilistion.
Before I pass from the question of Preference there is the question of tea, which is surely of importance to China. As my hon. Friend the Member for Kilmarnock (Mr. A. Shaw) stated earlier in the Debate with reference to another Amendment, London is a very important entrepot for the tea trade. When I made this point on the Second Reading the Chancellor of the Exchequer corrected me on a purely technical ground, saying, of course, that goods had been imported in bond and withdrawn without the Import Duty being paid. I know that, but the point is that by the action of differentiation against the other countries he is driving not only the entrepot but the blending trade from this country to Amsterdam. Instead of having the effect of stimulating British industries as he hoped it is having the effect of destroying British industries, as must always result when people who are not sufficiently informed attempt to mould trade policy by some preconceived notions of their own instead of on the lines on which they naturally run. The idea of a Preference was, I believe, that it would in some way bind India to this country, but I see that the chairman of a large tea company, which would benefit by a Preference, says
This measure would merely tend to direct foreign products to other markets to compete with our teas there instead of here; and in markets which the growers in India and Ceylon have created and fostered at very considerable expense.
So instead of benefiting the tea growers of India and Ceylon and so binding those countries to the Empire, it is simply diverting foreign products into other markets.
There is one other point on which I wish to speak. When the German Colonies were taken away from Germany, in accordance with a very high ideal, the principle was introduced of commending them to the greater countries of the world as trustees. We were to be the trustee for those backward countries. It is recited in the Covenant of the League in very noble words, and we were to administer them, not in our own interests but in the interests of the people themselves. That was to be their happy fate,
after having been ground under the heel of the selfish policy of the German Empire. Now, much to our surprise, and I think anger is the word, we find that the Government intend to incorporate these mandated territories in the fiscal system of the Empire. I know the answer of the Chancellor will be that he is merely taking power here to give a Preference, if he wishes, to the products of those territories, but the fact is he is arming himself with the necessary powers at this moment to make those territories an integral part of the fiscal system of the Empire. Far be it from me to use hard words, but I think that is not a thing that can be properly done by a person in a position of trustee. In the past the world has looked, without jealousy, on extensions of British territory. It has felt that if the British flag flew the benefits of British administration—incorruptibility, capacity, honesty, efficiency—would be extended to those territories for the good of all the world, and I think it can be said that it would have been impossible for us to have built up a world-wide Empire un less we had had the goodwill of the world, which was largely dependent on our policy of Free Trade. Great accretions have come to the Empire; enormous territories, some of them really having been taken by annexation. You can say that, as regards the Colonies taken by Australia and South Africa, there is very little to distinguish from actual annexation. But take the case of the Hedjaz, the richest part of Arabia. Who is to be the trustee, or in Mesopotamia, a country of enormous incalculable potential wealth? Is it right to say that we will make such fiscal arrangements as will direct the flow of trade from us to them to the detriment of our Allies? Is it right? It is wise? The answer to both these questions is "No." It is a surprising action on the part of the Government, which will do more than anything else to shake the confidence in the world in the purity of the motives for which we fought the War. Not a word of this was mentioned when the Finance Bill was introduced, but an Amendment was hurriedly introduced by the Chancellor and incorporated into the Bill. I cannot think of this action being taken without a deep sense of shame. It is a very discreditable thing, indeed, that when we take over the
trusteeship of these territories we should be found making arrangements that might conduce to our own benefit.

Major WARD-JACKSON: Might I ask whether New Guinea, which has been taken over by the Australians, is to enjoy the same preference as Australia?

Captain BENN: I mentioned New Guinea and South-West Africa, and I said there was little to distinguish the arrangements with regard to their taking over from sheer annexation. Personally, I have no objection to annexation in these cases. An Amendment I have down which was not called on, exempted those districts, and made them special cases. I think some measure of annexation is justified. But when you come to Mesopotamia, Arabia, and other places, this is a thing which should not he, and it will be an affront to the best feeling and the highest instincts of the people of this country. We have to remember, too, that what we do others can do. I do not know —it is impossible to say—whether the United States will take mandatory territories, hut presumably France and Italy may take them. There is the market in Turkey, for example, which we have been accustomed to enjoy, and where we haw trade privileges. What will our traders think, supposing that the other mandatories, the other trustees, do what we have done, and seize that territory and incorporate it behind a fiscal wall, perhaps even higher and more insurmountable than that proposed by the Government. I leave this matter. I think when the country really understands what has been done they will fool that the Government have made a blunder of judgment, and have done a thing which cannot be done to the credit of this country.
I wish to say, generally, of the Bill these few words in conclusion: We who oppose the preferential policy of the Government are always told, "Have not you learned the lessons of the War?" Well, I quite confess that that statement, which I have heard repeatedly used as an argument, takes me aback. I do not understand it. I have been away for five years trying to learn the lessons of the War. I have fought with Arabs, Frenchmen, Italians, Australians, and New Zealanders. They have all been at the War. They have had no lessons of this kind, and can it be that the only people who have learned the lessons of the War are the people who did not go to the War? The War, instead
of shaking what political convictions I had, greatly deepened and strengthened them. I went to the War certainly a Radical in sympathies, but I came back much more strongly a Radical in sympathies, and I do not understand the people who say "Have you not learned the lessons of the War?"
What are the lessons of the War? The first lesson is that this Free Trade Empire was able to finance the War. The Chancellor himself, when he was commending his Victory Loan to the people, explained that we had been in the strongest financial position up to the entry of America. Free Trade! The second lesson of the War was that, despite the submarine, we were able to transport freely our troops and our supplies into all parts of the world. To what was that due? To the Mercantile Marine. We had the strongest Mercantile Marine, as well as the bravest, in the world. What is the basis of the supremacy of our shipping. Free Trade! Is not that a lesson of the War? Is not that the lesson of the War? In the last great war in which we were engaged in the Napoleonic era hon. Gentlemen having the same fiscal bias as the Government introduced a system of navigation laws which very nearly destroyed our shipping supremacy. So there are two definite lessons of the War. One is that Free Trade financed the greatest war in the history of the planet, and the second is that it supplied us with a Mercantile Marine without which the Empire never could have been held together. There is another lesson of the War, and I am sorry that my hon. and gallant Friend the leader of a considerable party is not here this evening. He asked during the War—why is Germany so strong? And the answer was, "Protection." Another lesson of the War is: that a country based on the principles which the Government is introducing here fell before a Free Trade country, [An HON. MEMBER: "What about America?"] I should diverge from the strict lines of this Bill if I referred to America. But I suppose that the hon. Gentleman does not suggest that the natural resources of our country are in the same undeveloped condition as the natural resources of America?

An HON. MEMBER: What about the natural resources of the Empire?

Captain BENN: That is what I am saying. We were able to finance the War and the Empire as a Free Trade country,
and finance the very portions of the Empire to which the hon. Gentleman referred. There is another lesson of the War. Fifteen years ago the distinguished follower of the Chancellor of the Exchequer suggested that the Empire would not hold together unless you put a tax on food and raw materials. [HON. MEMBERS: "No!"] I could give many quotations to show that people said, "Unless you establish a cash nexus, the thing will disappear." I never heard any of the Colonial troops with whom I fought suggest that there was any money in the alliance that bound us together. The Empire was united without Imperial Preference. That is another lesson of the War. Another lesson of the War was that we had the good will of the world, which will not stand the test of preferential treatment and the exploitation of native territories. There is another lesson of the War. We had Protection during the War provided for us by the German submarines, and the people of this country have learned very well that shutting out foreign goods puts up prices. That is another lesson of the War. Another lesson of the War is that we must have increased production all over the world—in Japan and everywhere else. The more that is produced the sooner we shall get out of the financial crisis in which we are to-day, and the only way to do that is to put everybody to the job which he is best capable of performing, and to have the jobs done at the places where the raw materials are available, and at the cheapest possible rate, so that we can increase the world's production and enable us to emerge from the present economic crisis.
Hon. Gentlemen seem to imagine that the lesson of the War is that we should become more narrow in our sympathies, more distrustful of strangers, baiting aliens in the way we see done day by day by question and answer in this House. That is not the lesson of the War. The people who were at the War become more sympathetic to strangers and more anxious to become friendly with the other countries of the world. They also realise that the safety of the world depends on friendship with America, and after that friendship with all other countries. They see nothing in this Budget which will fortify the bonds between this country and America, but rather the reverse. No, the lessons people have learned in the War are, that what we must get rid of is every-
thing that makes for war. The people of this country are determined that they will destroy everything, whether it be armaments production, tariffs, or anything that makes for friction and enmity between the nations of the world. And not the least objection to this Budget is that it sets up a system of Protection and tends to destroy the free interchange of the products of all nations of the world, which in itself is not an unimportant bond of friendship.

Major HAYWARD: I beg to second the Amendment.
I am quite sure that every hon. Member who followed carefully the Debates on this Bill must have been impressed by the partial and discriminating manner in which the Chancellor of the Exchequer has applied the principles that are supposed to underlie the Bill. One of those principles was that where he found a tax he retained it, and certainly did not reduce it unless he found very important national interests to the contrary. By a very happy chance for him he found the new Import Duties, and his case for retaining them was that he found them and was entitled to retain them. He found another duty, the Excess Mineral Rights Duty, and it certainly was not in the national interests to reduce that duty, which was the case for reducing the Excess Profits Duty. But the Chancellor applied an entirely different principle and reduced the Excess Mineral Eights Duty. Another principle underlying the Bill was that something was to be done to consolidate the Empire. Something was to be done for what the Undersecretary of State for the Colonies called building up the moral unity of the Empire, and what the Chancellor of the Exchequer himself, I believe, called the spiritual unity of the Empire. So something was done with regard to these Preference proposals. The Chancellor told us that these Preference proposals were asked for again and again at the Imperial Conference and particularly at the Imperial Conference of 1917. There was another subject affecting the Colonies which was very materially before that Conference, that was the question of double Income Tax within the Empire.
Here the Chancellor of the Exchequer had a, great opportunity of doing something that the Colonies really wanted and were really anxious to have—that is, to deal with the question of double Income
Tax. But the Chancellor applies a different principle on this occasion and leaves it alone. If hon. Members read extracts from the Minutes of Proceedings in the papers laid before us as to the Imperial Conference on that occasion, they will find that the Imperial representatives were more insistent upon this question of double Income Tax than upon any other question whatever; in fact, the advocates of dealing with this question seem to have got quite heated. They demanded action from the Chancellor, and many of the representatives considered that the unity of this Empire was materially jeopardised by the retention of the double Income Tax. Here was another opportunity of doing something which they insisted on. They did not even want to wait until the War was over, but the Chancellor, instead of dealing with it as he has done with Preference in this Bill, leaves it to be dealt with by the Commission which is now sitting to inquire into the Income Tax. The Chancellor of the Exchequer was present on that occasion and he took part in the discussion. Hon. Members will remember that not so long ago in. this House the Chancellor of the Exchequer treated with a good deal of contempt the argument of my hon. and gallant Friend below (Captain Benn), when he asked that foreigners should be considered in this matter. The question of China was mentioned—China which, after all, is one of the greatest potential markets in the world.
What did the right. hon. Gentleman say in dealing with this question of Income Tax? He was a little more susceptible to the opinions of foreigners then. He said:
What you do in this case will bring you up at once against questions of the most serious consequence with other countries. I am sure that anyone who thinks about it will see that that is so.
So the Chancellor of the Exchequer was then quite ready, when dealing with the question of double Income Tax, zealously to regard the interests and susceptibilities of the foreigner, although he is not prepared to do so when considering the question of Preference. For ten years previous to 1913 our proportion of imports into the Colonies steadily decreased, while the proportion of imports from the Colonies into this country steadily increased. I am not so foolish as to suggest that the proportion of British imports into the Colonies decreased because they gave us a preference, nor am I going to suggest that the proportion of the Colonial imports into this
country increased because we had not yet given them one. The fact is that in this important matter of inter-Imperial trade there are great and grave problems involved which this question of Preference does not touch at all. Let me refer to one of them. I will take some figures from the Report for 1916 of our Commissioner in Canada. He refers to the relative yearly investments of British, United States, and Canadian capital in Canadian Government, municipal, revenue, and corporation bonds during the period 1909 to 1916, and he gives the proportions. In 1909, of the capital in such investments which was invested in Canada, the United Kingdom supplied 74 percent. of the whole, the United Slates supplied 3.9 percent., and the remaining 22.1 percent was provided by the Dominion of Canada itself. In 1916 the position was completely reversed. While we supplied only 1.5 percent. of the capital, the United States supplied 61.9 percent. and the remaining 33.6 percent, was provided by the Dominion itself. Our Commissioner says in a Note:
During the period 1909 to 1914 no great effort appears to have been made by the manufacturers of the United Kingdom to improve their trade with the Dominions, as a direct consequence or as a condition of these immense investments. With the financiers of the United States it was different. In the majority of cases it was made a condition of the contract that the funds so advanced should be expended on plant, machinery, and goods purchased in the United States, and to this end the manufacturers of the adjoining republic have confined their efforts.
10.0 P.M
In view of the great problems of that kind which confront us, it is really only lulling the House and the country into a false sense of security to suggest that any improvement can be made by Preference proposals; It is diverting the attention of the country from the things which ought to be tackled. Committees and Commissions have sat from time to time to consider these great questions. There are volumes of their Reports in the Library. Practically all the suggestions they contain—and some suggestions are common to every Report—are either forgotten or ignored, and the only one which must be carried out at once is this proposal for Preference. All I have to say in conclusion is that it is a very good thing that the moral and spiritual unity of this great Empire in the past has really depended on a very much more cohesive cement than these Preference proposals.

Mr. J. W. WILSON: Previous speakers have dealt very fully with the two chief points of the Amendment, and it is not my purpose to delay the House by covering the same ground. Believing as I do most strongly in the League of Nations and in the system of mandatories, I recognise the wisdom of the councillors in Paris in avoiding as far as possible all contentions and quarrels between the Allies in respect of the German colonies. I feel that the whole system is based upon the future administration of the different mandatory States, and I think that, above all the Allies, we and our statesmen should have been particularly careful to anticipate no decisions as to the conditions under which those States are taken over. I confess that I was aghast at the Amendment which appeared on the Paper in the name of the Chancellor of the Exchequer on the Committee stage, whereby he sought, and was enabled, to include any mandatory State taken over as though from a fiscal point of view it was a Colony to all intents and purposes. Members on this side of the House felt so strongly upon this that they put down a very careful Amendment, which Members will find on the Paper to-day. It takes out certain words to which I have already referred, and defines the territory alluded to in the words
which in the terms of a mandate of the League of Nations is administered under the laws of the Government of any part of His Mejesty's Dominions as an integral part of its territory.
That meets the objection raised by two hon. Members with regard to the territories which are practically annexed, and it expressly reserves judgment, and this is my point, with regard to any large and detached State which this country may be called on to administer, such as Mesopotamia, Arabia, and many other districts I need not enumerate. Why is. that advisable? In my opinion, it is because we do not know the conditions of apportionment and where the different German colonies are going to be distributed under the mandate. I feel that this country stands, even from a commercial point of view, to lose more than it gains if, by reason of this action, which may seem small at present though there is a great principle behind it, we introduce any fiscal system which will be so pronounced as to upset our Allies or neutral countries, or to produce retaliatory measures. We cannot hide from our eyes the fact that many of our
Allies, both in Europe and America, have an entirely different policy from our own. If we are going by this small precedent to give them an excuse and a reason and justification for the setting up of high walls of tariffs almost meaning the prohibition of many articles in countries which have been confided to them for administration, that is a premature action. I do not say it may not be justified eventually or that it may not be resorted to eventually, but I do say it is premature in the present case when we do not know what the League of Nations is going to decide in regard to the fiscal policy that is to be administered in these mandatory States. I confess it would be very undignified if this House of Commons had to modify the Finance Act of 1919 at the dictate of the League of Nations because it had laid down certain conditions to apply to a mandatory State and found that those were contrary to the conditions that the League laid down. It may be said that this can only be administered by Order in Council. That is true, and the Government may be able to avoid that difficulty and avoid such a predicament, I would almost say, by caution in that respect. But if so, why bring it in now, and why not leave it to a later Act of this Parliament, when we see how this system of Preference is going to work? It seems to me it is giving the case away, and it is taking the argument from under the feet of our negotiators and statesmen and administrators in any future negotiations with regard to the mandatory States.
I would appeal to the right hon. Gentleman whether even at this eleventh hour the Government would not be wise, when we are unable to debate this Clause on the Report stage, to recommit the Bill in respect of a modification of these few lines in this particular Clause. It would be quite in order in many cases to say that the matter had not been discussed and that there might be something that the Cabinet would like to consult about and to undertake that the matter would be adjusted in another House. But in this respect there is no other House on a Finance Bill, and this is the last occasion when any modification can be made in any of the Clauses or by this Bill. Therefore we cannot leave it to another House, and we must take the entire responsibility here. I would respectfully suggest to the Chancellor to consider whether he could not recommit the Bill in this respect. I do not
know whether that would meet the views of the drawers of the Amendment, but it certainly would meet the views of many Members who feel strongly on the subject, and might lead to a unanimous passing of the Finance Bill, which otherwise might not be the case. If he cannot do that, perhaps he will give an undertaking that this proposal shall practically be a dead letter, and that the Order in Council will not ha administered.

Mr. CHAMBERLAIN: I will deal first with the speech of my right hon. Friend who has just spoken, and I am not without hope that I can convince him that the course we have taken is not open to the objection which he makes. Let mo deal with two minor matters, or comparatively so, of which the hon. and gallant Gentleman who moved and my right hon. Friend complained, namely, that the inclusion of mandatory territory in the possible scope of Preference took the Committee by surprise and was inadequately considered by them. It is quite true my Amendment only appeared on the Paper on the day on which it came on for discussion as a starred Amendment, but the hon. and gallant Gentleman and his Friends had an Amendment down drawn upon the assumption that the Bill already did that which my Amendment did.

Captain BENN: No, Sir. The right hon. Gentleman knows that we were under the impression that the Government had not made up their mind in the sense the right hon. Gentleman says, and we were anxious it should be put explicitly in the Bill, and that was the purpose of my Amendment.

Mr. CHAMBERLAIN: That is quite sufficient for my purpose. The hon. and gallant Member knows his own intentions, and I do not, and I only infer from appearances. The Amendment was drawn on the assumption that the Government had not made up its mind, and to prevent it milking up its mind in the direction embodied in my Amendment. Accordingly the House had full notice by the Amendment in my name and by the Amendment in the name of the hon. and gallant Member and his Friends that this issue would be raised. It was raised, and there was a very full discussion and at least three speeches were made from this bench upon it, so that I do not think it can be suggested that the Committee was taken by surprise, or came
to a decision without knowing what the subject was. The second point of my right hon. Friend is that at this stage and in anticipation we should not be committed. We are not. The right hon. Gentleman himself stated that, and I repeat what he said, and if it gives him greater pleasure to hear it coming from my lips than from his own I am very glad.
But do not let the right hon. Gentleman misunderstand me. No doubt the intention of the Government to apply Preference to a mandated territory, provided that that is compatible with the mandate, is indicated by this Amendment, but the House is not committed, and nothing is done. There is no question of our being forced to repeal this Bill because of action by the League of Nations. This Bill merely seeks to give power to His Majesty by Order in Council to extend the preference to a territory mandated to him or to one of his Dominions if he thinks fit, and it is farther provided that that Order in Council, before being presented to His Majesty for approval, shall be submitted to Parliament. and if either House of Parliament carries a Resolution against it the Order in Council would not be submitted for His Majesty's approval. Accordingly, our liberty as a nation is complete, and the liberty of the House of Commons is complete, to judge each case on its merits when they know what territories are mandated, and on what conditions they are mandated, and I need not say that it is not the intention of His Majesty's present advisers, if they are responsible, to advise I his House or His Majesty to act in any way in a mandated territory contrary to the mandate under which that territory is confided to us.

Mr. WILSON: But it is an indication of what is in the Government's mind.

Mr. CHAMBERLAIN: So it is, and I will meet the right hon. Gentleman on that ground. It is the intention of His Majesty's Government that we should extend the Preference to territories mandated, undoubtedly, and I have no reason to think, as I speak now, that there is likely to be anything in any mandate which would render that either improper or impossible.

Mr. WILSON: That is not the point.

Mr. CHAMBERLAIN: Then in that case my right hon. Friend need not fear
that we shall have to revoke this action hereafter in consequence of remonstrances from the League of Nations, because if there is nothing contrary to the intentions of the authors of the League of Nations and those who give the mandate, and nothing contrary to the mandate, why should we be asked to withdraw this provision?

Mr. WILSON: I mentioned that as an alternative, but I made it quite clear that my main argument was that there was an example, and that we should not be able to protest against other nations doing worse.

Mr. CHAMBERLAIN: But I cannot answer all my right hon. Friend's arguments at the same time; he must allow me to follow him from one stage to another. It is always embarrassing, when you controvert successfully one argument—

Captain BENN: Not successfully !

Mr. CHAMBERLAIN: It certainly sounded immodest to say so, and therefore I was going to yield to my hon. and gallant Friend, but the moment that I controvert the argument of my right hon. Friend on that point he says that is only a minor point, and that I have not dealt with the major point. I am coming to the major point if he will allow me to proceed. His next argument is that a different view is taken by our Allies and America. America has given a Preference to its overseas colonies. But America has done more. It has had in operation for some years a preferential arrangement with Cuba, not merely on goods entering America from Cuba, but on goods entering Cuba from America, and it has maintained throughout what was the old British doctrine, which we have since abandoned, that that was perfectly compatible with the Most-Favoured-Nation Clause. They accordingly have a Preference in force, not merely with their own possessions or dependencies, but with independent territories. Cuba is not part of the United States. I really think that as we are following slowly, longo intervallo, both in time and extent, after America. we should not be accused by my right hon. Friend of setting them a bad example. If you give a preference to one foreign country all my right hon. Friend's objections fall. His objection is to giving a preference to a territory specially connected with you. My right hon. Friend's objection is that
our action will encourage our Allies and America to set up tariffs in countries which may be mandated to them. How does my right hon. Friend arrive at that conclusion? This is no suggestion that we should set up in a mandated country a customs tariff more favourable to us than to any of our competitors. I think that would be incompatible with the terms of any mandate which is likely to be given to any country. But that is not our proposal. My right hon. Friend is arguing against something which is not proposed here, which is not contemplated by anybody, and his argument really passes over, and is outside, anything which is within the Bill we are now discussing. What is the suggestion? It is that in respect of a particular territory—because under a mandate of the League of Nations this territory is put into our care and we are given special charge of its development, with special responsibilities, not that we should take for ourselves in that country any advantage which is not open to every other member of the League of Nations—but in respect of that relationship with us, we should give to them in our market something which we do not give to the whole world outside. That is a wholly different proposition, and so stated it is not open to any of the objections which my right hon. Friend put. I will give further proof if ho needs any further proof.

Mr. WILSON: I am not convinced it is not fiscal annexation.

Mr. CHAMBERLAIN: If you say that the goods of that country entering here, in so far as they are dutiable, should enter on more favoured terms than those of a country with which we have no connection, that is fiscal annexation! The right hon. Gentleman and I were for many years neighbours in the representation of East Worcestershire. We were always good friends—but we do not speak the same language! Let me guard myself, I do not want to obscure the position by entering into minor complications; therefore, for the moment, I am not talking of German South-West Africa, which may be embodied in the Union of South Africa, or belong to the general administration of the Union of South Africa in respect to Customs laws. I am talking of the class of case which my right hon. Friend has in mind, of West Africa, East Africa, and Mesopotamia. What we contemplate is favouring the import into this country of the goods
of the territory mandated. There is nothing to prevent any Ally, like us, saying in respect of its own Customs Duties that the territories mandated under the League of Nations to us shall enjoy the same preference in France, or America, or Italy, or elsewhere, as we propose to give here in England—nothing! If we proposed, with our authority as a mandatory Power, to give our exports a preferential position in the mandated places, that is a thing which other countries could not do. But every country in the world is admittedly entitled to give the same preference to our mandated territory that we give, whether by way of rebate on customs or by shipping facilities or in many other ways. I venture to hope that that explanation will show whether or not I have convinced my right hon. Friend that, at any rate, we are not doing what he supposed we were doing, that we are not doing anything contrary to the spirit of the League of Nations or the spirit of the mandate which is contemplated by the League of Nations; that we are not seeking any selfish advantages for ourselves in the markets of the mandated country. We are not dong in our own country for the products of the mandated country anything which any other nation may not introduce in its own markets if it so pleases. I have gone at some little length, but I hope not unduly, into the subject, because the discussion here, if it leaves any misapprehension, may cause a repercussion of a similar misapprehension and may lead the Councils of the great Powers that are now dealing with this matter into exactly the same misapprehension as the right hon. Gentleman, namely, to confuse what we are doing, which is giving some advantage in our own country to the products of mandated countries over foreign territories—to confuse that which is, at any rate, not a selfish aim with a selfish aim, namely, with favouring ourselves in respect of privileges in the country which is mandated to us under the authority of the League. With that I leave this particular point. I come to the Amendment my hon. Friend has moved.
There are two propositions in the Amendment. The first is a manifest historical fallacy, and the second is a prophecy about as good as any modern prophecy since prophets have ceased to be honoured. The first statement is, that this Budget introduces Protection for the first time into the fiscal
history of this country. Good gracious! My hon. and gallant Friend's party exists solely on the fact that they are the heroes who have, after a long struggle, eliminated Protection from our fiscal system, and yet the House is asked to declare that there never has been Protection in our system.

Captain BENN: Is the right hon. Gentleman reverting to the policy of 1840?

Mr. CHAMBERLAIN: No, I am not. I am merely commenting on historical facts of which I do not believe the hon. and gallant Gentleman is ignorant. We are told that this Budget introduces a system of Colonial Preference, which must ultimately lead to the taxation of food and raw materials. That is prophecy which proceeds upon the assumption that there have not been any duties on food. That was not the line taken by hon. Gentleman opposite during the Committee stage when we were dealing with sugar and tea, which are essential foods, and the party opposite had no intention when they sat on this bench of removing those duties. [An HON. MEMBER: "We reduced them!"] Yes, we have all reduced them, and I have reduced them when I could; but when those representing the party opposite sat here they never contemplated the possibility of abolishing the Sugar or the Tea Duty. The hon. and gallant Member proceeds on the assumption that there are none of these duties, and prophecies that if you have Preference you must have duties on food, by which I suppose he means new and additional duties on food and raw materials.
The principle on which His Majesty's Government proceeds has been stated again and again. It is the principle on which every Dominion proceeds in the matter of Preference. It is not that we should put on duties for the purpose of Preference, but that if there are any purposes for which we find it advisable to put on duties we give a preference. It is for this House and the country to decide what duties they will have. I do not prophesy so hastily as the hon. and gallant Member what the country will do or I will not do, but when he says as he did in the course of his speech that Preference once introduced would be permanent, then on that rare and happy occasion I am in hearty agreement with him. I believe the principle we establish that where there is a duty there is to be a Preference will be a permanent feature of our fiscal policy. I repeat what I said when I opened this
Debate: that if this Budget is referred to in the future with any words of praise or commendation, it will be because, for the first time, it established that principle by a legislative Act.

Sir D. MACLEAN: I will deal briefly with a few of the points raised by the right hon. Gentleman. First, with regard to the mandatory territories, our case is this: the object of Dominion Preference is to foster trade within the Empire. Clearly, therefore, the intention of the Amendment introduced into the Bill by the Government is to foster the trade of the mandatory territories within the British Empire. Whatever may be the merits or demerits of that, that is not the way to treat the mandatory territory of which you start by being the trustees. You ought to have left that proposal until the trust was solemnly handed over to you—until you knew the conditions of the trust to be administered. That would be the time to come to Parliament and ask for authority to apply to those mandatory territories a proposal which, whatever its merits, is the subject of most acute controversy here and in the country.
I want to take this opportunity of saying, on behalf of my Friends, how much we appreciate the courtesy with which the Chancellor of the Exchequer has treated us throughout these Debates. We have fought with great keenness but with complete good temper. We are much indebted to him for all that he has done to contribute to that very desirable end and for the concession ho has made on the various points as they have been raised. Where he has been able to meet anybody, he has done it in no grudging spirit, but with a courtesy which we all admire and very much appreciate. With regard to the manuscript Amendment, and the use of the words "for the first time," he knows that such Amendments have always the defects of their hasty manufacture. I was the draftsman, and I take all the discredit. Of course, we have enjoyed such good times under Free Trade that we view with horror a system of Protection now to be restarted. To come to a more substantial point in regard to the Amendment and our point that we object to the taxation of food. He said that we have acquiesced in the taxation of tea and sugar, and how it reminded him of what his distinguished father said in connection with this very proposal which we are now fighting, "If you are to give a preference to the
Colonies, you must put a tax upon food." And it was in that sense that we inserted those words in the Amendment. In those days, of course, there were taxes on sugar and also upon tea. Our point is that it is and must be the inevitable consequence, if this is allowed to go on, that the full system must come into operation. My right hon. Friend, with his customary frankness, has said so quite definitely.
Let us get all mistiness out of our minds. It is said by some that it is only a temporary proposal which can be readjusted at a later date. It is nothing of the sort. It has been reiterated by the only person whose opinions on this occasion count for very much—that is to say, the spokesman of the Government. It is what is said officially that counts, and that has been said officially, and very honestly. It is admirable to know where we are. We can fight on a clear issue. You are on the first stages of your long fight. It is on the Statute Book that we are here and now setting up a system of Preference to the Dominions which must inevitably lead to taxes on corn, on meat, on hides, on the whole range of our raw materials. And our Dominions have never made any suggestion that that is a condition of their loyalty or their service to us or to the Empire at large. They say, "We are delighted to have them, but if you think that by means of these duties you are going to impose the least burden upon your poor, keep them away from us; we do not want them." That is straight and splendid of them. We give it to them. "By all means," they say, "we take it." We may be wrong, but that is the old issue which we are going to fight on, not only in this House, but elsewhere. We are going to say with all the sincerity of conviction, and, as we believe, of the experience of the past, that if you put taxes on commodities you raise their price to the consumer, and if you put, as you must and will, in giving preferences to our Dominions, taxes on your corn or meat or raw materials, you will raise the cost of living to the general mass of the people of this country. Our Labour Friends are solid with us in that. Whatever may be suggested about us, it cannot be suggested that they, at any rate, do not know what their people want and think. They do know. Time and time again their non-party representative bodies have passed resolutions with complete unanimity. This House thinks they are wrong; the majority
have the right to say they are wrong, and you have legislatively said they are wrong. Let us have no more humbug about it. There it is.
With regard to Protection there was an Amendment moved by an hon. and learned Friend of mine who said, "If we are going to carry these things on for a little longer along that path let us carry them along till 1st September." I thought, in my innocence, that if that was not accepted in its entirety perhaps my right hon. Friend in his genial way would say, "Go a little further and I will take it to 31st December," but he found him so willing to follow him that he went a long way further, and they actually carried these duties a month into the new financial year. There they are landed right into it. They carry the whole thing on. You have not to start de novo at all. It was delightful to hear a burst of candour from a Back Bench one night. An hon. Member said something like this, "I am rather tired about Free Trade. I am not very much bothering about Tariff Reform. But what about motor cars?" He knows perfectly well what it all meant. He wanted Protection for motor cars. You are landed right into it. I congratulate the Chancellor of the Exchequer. He has done very well. We have fought it with our eyes wide open and so has he. I hope those who were partially blinded in those early days of the Debate now see what it really means. It is perfectly clear. We are bound to vote for the Amendment as the only opportunity we have had of having a Division on our strong conviction and belief in regard to that. Although technically it looks like a vote against the whole Bill it is not so intended, but simply to have an opportunity of expressing our opinion on the last stage of the Budget at what we believe the consequences will be.

Mr. SIDNEY ROBINSON: I wish to say a few words in reference to the actual deficit with which we are faced. 1 do not know how many hon. Members can say what it is. I am certain very few people outside have the faintest idea what it is. When I say the deficit, apart from the sale of assets, amounts to £690,000,000, I think many hon. Members will be inclined to say the figure is overstated, but it is not, and we must realise that we have to make good this deficit somehow or other next year. We shall have to find the money either by reducing our expenditure or by increasing taxa-
tion. We all hope we shall reduce expenditure. It is just as well that the House should be brought back to see how these figures are arrived at. In his speech on the Second Reading, speaking of the revenue, the Chancellor of the Exchequer said:
Cash we hope will be paid into the Exchequer over and above the very considerable amounts from sources which are appropriated by Votes in Aid. I will give the figures of the Appropriation in Aid: In aid of the Ministry of Munitions, £140,000,000; in aid of the Ministry of Shipping, £50,103,000; in aid of the War Office. £50,000.000; in aid of the Admiralty, £14,000,000; making £254,000,000 in all.
That is made up in this way from sales of the stores or other matters that can be salved. But then he had to take into account a further £250,000,000. I ventured. to put down a question to get the exact. figure he expected to raise in the current year, and he said the figure was practically that shown in his Budget speech of £200,000,000. Turning to the balance-sheet for the current year, there is at first a sum of £233,000,000 which came openly into the accounts. That totalled up to no less than £689,000,000. I only make this protest. I think we should have raised very much more from the Super-tax or Income. Tax, however hard it might have been, as the only method whereby we could curb the reckless expenditure which is going on in the country at the present time, and which, I am sorry to say, is also going on in some Departments of the Government itself. This country came up to realities when the question of 6s. per ton more on coal had to be faced. Then the country began to understand it. So, bitter as it would have been, I think the Chancellor of the Exchequer would have been well advised, and it would have been in the. interests of the community at large, if he had dealt with this matter and faced this deficit in a very much bolder way. Though he has made a Budget popular in the City and in the country, I do not believe it is sound and in the best interests of the country.

Mr. SEDDON: I had not the slightest idea of speaking but for one or two remarks which fell from the Leader of the official Liberal party. He said "Let us have no dubiety or humbug." I listened to the speech of the hon. and gallant Gentleman who moved the Amendment, and it appears to me that his right hon. Friend the Member for Peebles has taken the occasion of that Amendment to echo the
sentiments of his exiled leader from this House, and to prepare for another engagement similar to the ones we used to have in pre-war days. The last right hon. Gentleman said, in one of those oft-heard perorations, that if you give a preference it follows that you must place a tax on food—corn, beef, and all the other requisites. But does he forget that Mr. Asquith set up a Commission to inquire into the food supply of this country, and that the responsible Government entered into a bargain with the agriculturists that if they would do so-an-so, to save the life of the community in face of the submarine menace, then the Government would solemnly enter into a bargain for the next five years with the farming community, which would be protected against undue competition? Surely, if there is so much vitality and so much truth in the principles of Cobden, there should be at least as much truth and honesty in the pledge of the Government to a great industry like the agricultural industry !
Is statesmanship so bankrupt in this country that you cannot conceive something, instead of taxing the food of the people? could you not make arrangements with the farming community whereby they may continue in their prosperity? I would view the position with concern if the agricultural people were deceived by the Government, because the pledge given by the Government has led them to increase the wages of their labourers. It was a bargain. I was a member of the Milner Commission. I said, "If you are going to give a guarantee of prices, you must by the same token give a minimum wage to the agricultural workers." That minimum has gone up through the pressure of organisation, and it must be admitted that to-day both the farmer and the labourer are in a better position than they have occupied for the last sixty or eighty years. Is not agriculture as important as shipping? Surely it is as important as any industry in the country! We know that, apart from its fiscal side, a nation without an agricultural population is doomed to be a failure sooner or later. I say it is good business for the Government of the country to see that everything possible is done to secure that we have a well-paid, virile, agricultural population. I want to throw out a suggestion to those who believe that Cobden said the last word as to
the financial arrangements of the country, Cannot you arrange to keep the agricultural labourers' wages up? Is the right hon. Gentleman the Leader of the Liberal Opposition going to the country to tell the agricultural labourer that the miners have got their natural protection in the coal, but as to the labourer and the farmer, having served the country in its hour of need, we have no further use for them, and they must go back to the conditions which existed for them before the War?

Mr. TYSON WILSON: Does the hon. Member suggest that agricultural workers' wages would both be raised had the pledge not been given? It is nonsense.

Mr. SEDDON: I am not going to enter into that speculation. At that time the greater number of agriculturists were not living in luxury. Many, indeed, were in a very precarious position, and had there been an attempt to force wages up to 30s. or 40s. it would have brought disaster to agriculture.

Mr. T. WILSON: The wages have been raised by the pressure of the men's organisation.

Mr. SEDDON: I want the prosperity of agriculture to be maintained. I want the wages to be kept up, and I can conceive a scheme whereby the Government can keep them up, by becoming a modern Joseph, by buying up the wheat production of the whole country and giving the farmers sufficient for their crops to enable them to pay their men decent wages and to secure themselves at the same time; and buy the crops of the world, and so mix the two purchases together that there will be very little, if any, increase in the cost of the food of the people, and we should have attained this by the solemn pledge which the Government gave to the farmer and which, I hope, will never be broken.

Mr. ADAMSON: In reply to what was stated by the last speaker, so far as the Labour party are concerned, we are just as anxious to maintain the wages of the

agricultural labourer as any other hon. Member—[HON. MEMBERS: "More so!"] —though we may not agree with the particular policy which he was outlining for maintaining their wages. But I do not rise to deal with this particular point. I rise to say a few words, first, of appreciation of the manner in which the Chancellor has met a considerable number of the Amendments that have been moved by the party for whom I speak. We do not underestimate the value of the concessions that have been given on this occasion. At the same time, it would simply be deluding the Chancellor and the Government if I did not make it clear that there are still in this Finance Bill matters of fundamental difference between our party and the Government. With us it is not only a question of Imperial Preference, or Free Trade versus Protection. We do not believe that the close, keen dividing line of the future will be limited so much as it has been in the past between the various political parties in this country to Free Trade and Protection. We disagree profoundly with that part of the Budget which provides for continued borrowing while at the same time war profits are allowed to escape; and not only have war profits been allowed to escape, but in the same Budget, which provides for a reduction of 50 percent. in the Excess Profits Tax we have also had the question whether it will be necessary for the people of this country to face in the very near future a levy on capital by way of relieving the necessity for continuing year in and year out to keep taxation at its present high level or even to increase it. These are questions that constitute a fundamental difference between the Chancellor and ourselves, and if I had not taken the opportunity of saying these few words our party might have been misunderstood, and so I thought it better not to give a silent vote.

Question put, "That the words proposed to be left out stand part of the Question."

The House divided, Ayes, 219;Noes, 48.

Division No. 79.]
AYES.
11.7 p.m.


Agg-Gardner, Sir James Tynte
Austin, Sir H.
Bell, Lieut.-col. W. C. H. (Devizes)


Ainsworth, Captain C.
Baird, John Lawrence
Benn, Sir Arthur S. (Plymouth)


Allen, Col. William James
Baldwin, Stanley
Betterton, H. B.


Amery, Lieut.-Colonel L. C. M. S.
Balfour, George (Hampstead)
Bigland, Alfred


Archdale, Edward M.
Banner, Sir J. S. Harmood-
Birchall, Major). D.


Archer-Shee, Lieut.-Colonel Martin
Barlow, Sir Montague (Salford, S.)
Blades, Sir George R.


Armitage, Robert
Barnes, Major H. (Newcastle, E.)
Borwick, Major G. O.


Astbury, Lt.-Com. F. W.
Sarnett, Captain Richard W.
Bowles, Col. H. F.


Astor, Major Hon. Waldorf
Barnston, Major Harry
Boyd-Carpenter, Major A.


Atkey, A. R.
Beck, Arthur Cecil
Brackenbury, Col. H. L.


Breese, Major C. E.
Hinds, John
Rees, Captain J. Tudor (Barnstaple)


Brittain, Sir Harry E.
Hood, Joseph
Reid, D. D.


Brown, Captain D. C. (Hexham)
Hope, James Fitzalan (Sheffield)
Remer, J. B.


Buchanan, Lieut-Colonel A. L. H.
Hope, Lt.-Col. Sir J. (Midlothian)
Rendall, Athelstan


Burdon, Colonel Rowland
Hopkins, J. W. W.
Renwick, G.


Burn, Colonel C. R. (Torquay)
Hopkinson, Austin (Mossley)
Richardson, Sir Albion (Peckham)


Burn, T. H. (Belfast)
Hughes, Spencer Leigh
Robinson, S. (Brecon and Radnor)


Campbell, J. G. D.
Hunter, Gen. Sir A. (Lancaster)
Robinson, T. (Stretford, Lancs.)


Carew, Charles R. S, (Tiverton)
Hunter-Weston, Lieut.-Gen. Sir A. G.
Rodger, A. K.


Carr, W. T.
Hurd, P. A.
Roundell, Lieutenant-Colonel R. F.


Casey, T. W.
Jackson, Lieut.-Col. Hon. F. S. (York)
Rutherford, Sir W. W. (Edge Hill)


Cautley, Henry Strother
Jameson, Major J. G.
Samuel, S. (Wandsworth, Putney)


Chadwick, R. Burton
Jesson, C.
Sanders, Colonel Robert Arthur


Chamberlain, Rt. Hon. J. A. (Birm., W.)
Jodrell, N. P.
Sassoon, Sir Philip A. G. D.


Chamberlain, N. (Birm., Ladywood)
Johnson, L. S.
Scott, A. M. (Glas., Bridgeton)


Chilcott, Lieut-Com. H. W. S.
Jones, G. W. H. (Stoke Newington)
Seager, Sir William


Clay, Captain H. H. Spender
Jones, J. Towyn (Carmarthen)
Seddon, J. A.


Clough, R.
Jones, Wm. Kennedy (Hornsey)
Shaw, Captain W. T. (Forfar)


Coats, Sir Stuart
Kidd, James
Shortt, Rt. Hon. E. (N'castle-on-T., W.)


Cobb, Sir Cyril
King, Com. Douglas
Simm, Colonel M. T.


Cockerill, Brigadier-General G. K.
Knight, Capt. E. A.
Smith, Harold (Warrington)


Colvin, Brigadier-General R. B.
Knights, Capt. H.
Sprot, Colonel Sir Alexander


Cope, Major W. (Glamorgan)
Law, A. J. (Rochdale)
Stanier, Capt Sir Beviile


Courthope, Major George Loyd
Law, Right Hon. A. Bonar (Glasgow)
Stanley, Colonel Hon. G. F. (Preston)


Craig, Captain Charles C. (Antrim)
Lewis, Rt. Hon. J, H. (Univ. Wales)
Stanton, Charles Butt


Craig, Col. Sir James (Down, Mid.)
Lewis, T. A. (Pontypridd, Glam.)
Steel, Major s. Strung


Craik, Rt. Hon. Sir Henry
Lister, Sir R. Ashton
Stephenson, Colonel H. K.


Croft, Brig.-Gen. Henry Page
Lloyd, George Butler
Strauss, Edward Anthony


Davidson, Major-Gen. Sir John H.
Locker-Lampson, Com. o. (Hunt'don)
Sturrock, J. Leng.


Davies, Alfred Thomas (Lincoln)
Long, Rt. Hon. Walter
Surlees, Brig.-Gen. H. C.


Davies, T. (Cirencester)
Loseby, Captain C. E.
Sutherland, Sir William


Denison Pender, John C.
Lowther, Col. Claude (Lancs., Lons)
Sykes, Sir C. (Huddersfield)


Dewhurst, Lieut.-Com. H.
Lyle, C. E. Leonard (Stratford)
Talbot, G. A. (Hemel Hempstead)


Dockrell, Sir M.
M'Guffin, Samuel
Terrell, G. (Chippenham, Wilts)


Doyle, N. Grattan
Mackinder, Halford J.
Thomas-Stanford, Charles


Edwards, A. Clement (East Ham, S.)
M'Laren, R. (Lanark, N.)
Thomson, F. C. (Aberdeen, S.)


Eyres-Monsell, Commander
Malone, Major P. (Tottenham, S.)
Townley, Maximilan G.


Falcon, Captain M.
Marriott, John Arthur R.
Tryon, Major George Clement


Farquharson, Major A. C.
Meysey-Thompson, Lt.-Col. E. C.
Waddington, R.


Fell, Sir Arthur
Molson, Major John Elsdale
Walker, Colonel William Hall


Forestier-Walker, L.
Moore-Brabazon, Lieut.-Col. J. T. C.
Walton, Sir Joseph (Barnsley)


Fraser, Major Sir Keith
Morison, T. B. (Inverness)
Ward-Jackson, Major C. L.


Ganzoni, captain F. C.
Morrison-Bell, Major A. C.
Ward, Colonel L. (Kingston-upon-Hull)


Gibbs, Colonel George Abraham
Murray, Major C. D. (Edinburgh, S.)
Ward, W. Dudley (Southampton)


Gilbert, James Daniel
Murray, Hon. G. (St. Rollox)
Waring, Major Walter


Gilmour, Lt.-Col. John
Nail, Major Joseph
Watson, Captain John Bertrand


Glyn, Major R.
Newman, Sir R. H. S. D. (Exeter)
Weston, Colonel John W.


Green, J. F. (Leicester)
Nicholson, R. (Doncaster)
Wheler, Colonel Granville C. H.


Greene, Lt.-Col. W. (Hackney, N.)
Nicholson, W. (Petersfield)
White, Col. G. D. (Southport)


Gregory, Holman
Palmer, Brig.-Gen. G. (Westbury)
Whitla, Sir William


Gretton, Col. John
Parker, James
Wigan, Brig.-Gen. John Tyson


Griggs, Sir Peter
Parry, Major Thomas Henry
Wild, Sir Ernest Edward


Gritten, W. G. Howard
Peel, Lt.-Col. R. F. (Woodbridge)
Williams, Lt.-Com. C. (Tavistock)


Guest, Maj. Hon. O. (Leic, Loughbore')
Perkins, Walter Frank
Wills, Lt.-Col. Sir Gilbert Alan H.


Hacking, Captain D. H.
Pollock, Sir Ernest Murray
Wilson, Colonel Leslie (Reading)


Hailwood, A.
Pownall, Lieut.-Colonel Assheton
Winterton, Major Earl


Hall, Lieut.-Col. Sir Fred. (Dulwich)
Pratt, John William
Wood, Sir J. (Stalybridge and Hyde)


Hamilton, Major C. G. C. (Altrincham)
Prescott, Major W. H.
Worsfold, T. Cato


Hancock, John George
Purchase, H. G.
Worthington-Evans, Rt. Hon. Sir L.


Henderson, Major V. L.
Rae, H. Norman
Young, William (Perth and Kinross)


Hennessy, Major G.
Raeburn, Sir William
Younger, Sir George


Henry, Dennis S. (Londonderry, S.)
Randles, Sir John Scurrah



Herbert, Denniss (Hertford)
Ratcliffe, Henry Butler
TELLERS FOR THE AYES.—Lord E.


Hilder, Lieut.-Colonel F.
Raw, Lieut-Colonel Dr. N.
Talbot and Captain F. Guest.


NOES.


Acland, Rt. Hon Francis Dyke
Hirst, G. H.
Sexton, James


Adamson, Rt. Hon. William
Holmes, J. S.
Shaw, Tom (Preston)


Bell, James (Ormskirk)
Johnstone, J.
Short, A. (Wednesbury)


Benn, Capt. W. (Leith)
Jones, J. (Silvertown)
Sitch, C. H.


Bowerman, Right Hon. C. W.
Kenworthy, Lieut-Commander
Smith, Capt. A. (Nelson and Colne)


Brace, Rt. Hon. William
Kiley, James Daniel
Smith, W. (Wellingborough)


Briant, F.
Maclean, Neil (Glasgow, Govan)
Spencer, George A.


Cape, Tom
Maclean, Rt. Hon. Sir D. (Midlothian)
Tootill, Robert


Carter, W. (Mansfield)
Murray, Dr. D. (Western Isles)
Williams, A. (Conset, Durham)


Davies, Alfred (Clitheroe)
Newbould, A. E.
Williams, Col. P. (Middlesbrough)


Davison, J. E. (Smethwick)
O'Grady, James
Wilson, Rt. Hon. J. W. (Stourbridge)


Edwards, C. (Bedwellty)
Onions, Alfred
Wilson, W. T. (Westhoughton)


Griffiths, T. (Pontypool)
Parkinson, John Allen (Wigan)
Wood, Major Mackenzie (Aberdeen, C.)


Grundy, T. W.
Richards, Rt. Hon. Thomas
Young, Robert (Newton, Lancs.)


Guest, J. (Hemsworth, York)
Richardson, R. (Houghton)



Hartshorn, V.
Roberts, F. O. (W. Bromwich)
TELLERS FOR THE NOES.—Mr.Hogne and Mr. G. Thorne


Hayward, Major Evan
Rose, Frank H.



Bill read the third time, and passed

Orders of the Day — WAR LOAN BILL.

Read a second time, and committed to a Committee of the Whole House for To-morrow. —[Mr. Chamberlain.]

Orders of the Day — GOVERNMENT OF THE SOUDAN LOAN [GUARANTEE.]

Resolution reported.
That it is expedient to authorise the Treasury to guarantee the payment of interest on a loan to be raised by the Government of the Soudan not exceeding an amount sufficient to raise £6,000,000 and to charge on the Consolidated Fund any moneys required to fulfil such guarantee.

Resolution agreed to; Bill ordered to be brought in upon the said Resolution by Mr. Chamberlain, Mr. Baldwin, and Mr. Harsmworth.

GOVERNMENT OF THE SOUDAN LOAN (GUARANTEE) BILL, —"to authorise the Treasury to guarantee the payment of interest on a loan to be raised by the Government of the Soudan," presented accordingly, and read the first time; to be read a second time To-morrow, and to be printed. [Bill 148.]

Orders of the Day — HIGH PRICES AND PROFITS.

Ordered,
That a Select Committee be appointed to inquire how far the present high prices of articles of general consumption are due to excessive profits on the part of any persons concerned in their production, transport, or distribution, and to advise as to what action can usefully be taken in the matter.

The Committee was accordingly nominated of Major Barnes, Mr. R.A. D. Carter, Sir Henry Cowan, Major Lloyd-Greame, Mr. Hartshorn, Mr. Holmes, Mr. Hurd, Mr. Inskip, Lieutenant-Colonel Jackson, Sir Arthur Steel-Maitland, Mr. Thomas Robinson, Mr. Alfred Short, Mr. Simm, Mr. Sitch, and Mr. George Thorne.

Ordered,
That the Committee have power to send for persons, papers, and records.

Ordered,
That five be the quorum."—[Colonel Gibbs.]

Tile remaining Orders were read, and postponed.

ADJOURNMENT.—Resolved.

"That this House do now adjourn."—[Colonel Sanders.]

Adjourned accordingly at Twenty-one minute after Eleven o'clock